A tax is a compulsory financial charge imposed on a taxpayer by the government to meet out the expenditure of the government and various public services. Not paying the taxes on time, is punishable by the law. It involves both direct and indirect taxes either through money or as its labour equivalent. Many countries have different taxation systems. Some levy a flat percentage rate on annual income of a person but most of the scale taxes are progressive and depends on brackets of annual income amounts. Some countries even charge tax on an individual as well as on corporate income. There are many types of taxes wealth taxes, property taxes, sales taxes, payroll taxes, duties and tariffs etc. Tax-In India In India, taxes are levied by the Central and State Governments by the virtue of its power provided to them by the Constitution of India. Few minor taxes are levied by municipalities as well. But article 265 imposes restrictions on it by stating that “No tax shall be levied or coll