Definition of Tax in Accounting
One of the most frequently debated political topics is taxation. Taxation is the practice of collecting taxes (money) from citizens based on their earnings and property. The money raised from taxation supports the government and allows it to fund police and courts, have a military, build and maintain roads, along many other services. Taxation is the price of being a citizen, though politicians and citizens often argue about how much taxation is too little or too much.
Also, Read:- Cost Centers in Tally Accounting
Types of Taxes & Tax Structure in India
The Constitution of India gives the authority to governments to levy taxes in India under the Indian tax system. As per the directives of the Indian tax system, the government collects taxes from its citizens to generate income for undertaking public-works projects and improve the country’s economic footprint. The Indian tax system allows common taxpayers to plan their taxes and earn maximum tax-saving benefits. Additionally, if an individual invests money into any tax-saving instrument, there is a provision for tax exemption on the same. Let us understand the different types of taxes in India and their benefits in detail.
Also, Read:- Importance of capital in business
The tax structure in India
While direct taxes are levied on taxable income earned by individuals and corporate entities, the burden to deposit taxes is on the assessees themselves. On the other hand, indirect taxes are levied on the sale and provision of goods and services respectively and the burden to collect and deposit taxes is on the sellers instead of the assessees directly.
The taxation system in India is such that the taxes are levied by the Central Government and the State Governments. Some minor taxes are also levied by the local authorities such as the Municipality and the Local Governments.
Also, Read:- Types of investment, if you invest the money