Skip to main content

What Is Tax? How Does It Function In India?

 

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 collected except by the authority of law”. Therefore, each tax collected must be aided by an accompanying law, passed either by the Parliament or the State Legislature.

With time, India has abolished a number of taxes and imposed new taxes. A few of them include inheritance taxes, interest tax, gift tax, wealth tax etc. wealth tax was repealed in the year 2015.  With the replacing of these the establishment of Direct Taxes Code was also dropped.

If you are finding it difficult to deal with the taxation system, you should contact some finance companies for help like Chandan Agarwal &co.

TIP

Tax is a compulsion for everyone. Don’t avoid it. It is our duty towards our nation. Follow the rules and regulations of the taxation system.

Comments

Post a Comment

Popular posts from this blog

Financial Advisory Roles of a Chartered Accountant

Introduction Did you know that 70% of small businesses seek the advice of a financial advisor to navigate complex financial landscapes ? If you’re running a business or planning to start one, the insights from a Chartered Accountant (CA) can be invaluable. They don't just crunch numbers; they serve as strategic partners who can help guide your financial decisions and drive your business forward. In this article, we’ll explore the various financial advisory roles that a Chartered Accountant plays, showing you how they can be an essential asset to your business. 1. Business Planning and Strategy Crafting a Financial Roadmap One of the primary roles of a Chartered Accountant is to help you craft a robust business plan. They can assist in outlining your financial goals, identifying potential risks, and developing strategies to achieve your objectives. Whether you're starting a new venture or looking to expand, a CA can help you create a financial roadmap that aligns with your busin...
Post a Comment
Read more

Why Every Small Business Should Hire a Chartered Accountant

  Running a small business comes with numerous challenges, and managing finances is one of the most critical aspects. Hiring a Chartered Accountant (CA) can be a game-changer for your business. Here’s why every small business should consider hiring a Chartered Accountant, with a spotlight on CA Chandan Agarwal & Co. . Expertise in Financial Management Chartered Accountants possess extensive knowledge and training in financial management. They can help small businesses: Prepare Financial Statements: Accurate financial statements are crucial for understanding the financial health of your business. Tax Planning and Compliance: CAs ensure that your business complies with tax regulations, helping you avoid penalties and maximize deductions. Budgeting and Forecasting: Effective budgeting and forecasting can guide your business decisions and promote growth. Time-Saving Managing finances can be time-consuming, especially for small business owners who wear multiple hats. A Chartered ...
Post a Comment
Read more

The Role of a Chartered Accountant in Financial Planning

Financial planning is a crucial aspect of both personal and business finance. One key player who can significantly contribute to effective financial planning is a Chartered Accountant (CA). Let's explore the vital role that Chartered Accountants play in financial planning and why their expertise is indispensable. Key Responsibilities of a Chartered Accountant in Financial Planning Budgeting and Forecasting : Chartered Accountants assist in creating detailed budgets and financial forecasts. This helps businesses and individuals plan for future expenses and investments. Tax Planning : They provide expert advice on tax-related matters, ensuring compliance with tax laws while minimizing tax liabilities. Investment Advice : CAs analyze financial data to suggest profitable investment opportunities, helping clients grow their wealth. Financial Reporting : Accurate and timely financial reports prepared by Chartered Accountants enable informed decision-making. Risk Management : They identif...
Post a Comment
Read more