Write a note on Taxation policy of Government
Answers
Taxation is the most important source of government revenue. Governments can use tax revenue to provide public services such as social security, health care, national defence, and education.
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Answer:
Ta.xation is the means by which a government or the taxing authority imposes or levies a ta.x on its citizens and business entities. From income ta.x to goods and services tax (GST), taxation applies to all levels.
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The Central and State govern.ment pl.ays a significant role in determining the ta.xes in India. To streamline the process of taxation and ensure transparency in the country, the state and central gove.rnments have undertaken various pol.icy reforms over the last few years. One such change was the Goo.ds and Services Ta.x (GST) which eased the tax regime on the sale and deliverance of goods and services in the country.
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A detailed bre.ak.down of the proce.dure for fili.ng the tax:
The tax structure in India can be classified into two main categories:
- Direct Tax
- Indirect Tax
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⭐ EXTRA INFO⬇️
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✨Direct Tax: It is defined as the tax imposed directly on a taxpayer and is required to be paid to the government. Also, an indiv.idual cannot pas.s or assign another person to pay the taxes on his behalf.
Some of the direct taxes imposed on an Indian taxpayer are:
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Income tax- it is the tax applicable on the income earned by an individual or taxpayer.
Corporate tax- this is the tax applicable on the profits earned by companies from their businesses.
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✨Indirect Tax:It is defined as the tax levied not on the income, profit or revenue but the goods and services rendered by the taxpayer. Unlike direct taxes, indirect taxes can be shifted from one individual to another. Earlier, the list of indirect taxes imposed on taxpayers included service tax, sales tax, va.lue added tax (VAT), central excise duty and customs duty.
However, with the implementation of goods and services tax (GST) regime from 01 July 2017, it has replaced all forms of indirect tax imposed on goods and services by the state and central governments.
GST has not only been reduced the physical interface but also lower the cost of compliance with the unification of the indirect taxes.