|
|
| |
| Home » Tax |
| |
Tax |
|
|
The existence of tax can be traced even in the ancient times. The word “Tax” originating from “Taxation” means an estimate. The financial charge levied by a state or a functional equivalent of a state on an individual or a legal entity can be termed as tax. During that period tax were levied on income and wealth on the sale or purchase of merchandise or livestock. A subnational entity has also the power of levying tax. Taxes can be Direct Tax and Indirect Tax. Tax is meant to be paid to support the Government.
|
A tax is a mandatory and enforced contribution by the individual or legal entity. It is not a voluntary contribution or donation. The Government imposes the tax. Tax can be collected under different names like, tribute, toll, impost, subsidy, duty, custom, excise, aid etc.
The traditional or pre-capitalist states and their functional equivalents accepted tax in the form of kind and corvée. The modern taxation system taxes are paid in money. The politics and economics of the country show the influence of tax. The method of taxation can be debated in the politics. The government agency performs the collection of tax. On non-payment of tax or incomplete payment of tax criminal penalties are imposed on an individual or any non-paying entity.
Taxes are imposed on income and wealth and in the same way also levied on sale or purchase of merchandise or livestock. The method of collecting tax was not organized on the primitive days and was not collected regularly. The tax was collected time in a haphazard manner from time to time. In the present age tax is collected in a much organized and systematic way. The income tax is levied on the income of an individual or any paying entity. The Finance Act fixes the rate of income tax every year. The income tax is imposed for the income from sources like, house property income, salary, profits and gains of business profession, capital gains and income from any other sources.
The income tax is payable by individual, company, association firm, local authority, partnership firm, Hindu undivided family etc. The income tax imposed on the salary of a person is deducted in advance from the salary and is based on the estimated income of the current financial year.
The percentage of the tax burden is related to income or consumption. The rate of the tax progresses from low to high, from high to low, or proportionally. The Progressive tax, Regressive tax, Proportional tax, is imposed on this rate. In progressive tax the effective tax rate increases with increase of the amount to which the rate is applied. In case of regressive tax the tax rate decreases with increase of the amount to which the rate is applied. In case of proportional tax the tax rate remains fixed with increase of the amount to which the rate is applied. Taxes can be direct tax or indirect tax. The direct taxes are collected directly from the people or organizations on whom they are levied. On the other hand indirect tax is not collected from the person on whom the tax has been levied. It is collected from some other person.
|
|
| |
|
|
|
|
|
|
