Taxation at ITCL

What is Taxation?

A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or national).

Overview

Taxation is a means by which governments finance their expenditure by imposing charges on citizens and corporate entities. The main purpose of taxation is to accumulate funds for the functioning of the government machineries.

Frequently Asked Questions

What is taxation and how it works?

Taxation refers to the fees and financial obligations imposed by a government on its residents. Income taxes are paid in almost all countries around the world. However, taxation applies to all payments of mandatory levies, including on income, corporate, property, capital gains, sales, and inheritance.

What taxation means?

Introduction. Taxation is the means by which a government or the taxing authority imposes or levies a tax on its citizens and business entities. From income tax to goods and services tax (GST), taxation applies to all levels.

What are the advantages of taxation?

One of the most basic advantages of taxes is that they allow the government to spend money for basic operations. Article I, Section 8 of the U.S. Constitution lists reasons that the government may tax its citizens. These include to raise an army, to pay foreign debt and to operate a post office.

Is PF taxable?

At the moment, PF contributions are not taxable unless you withdraw the entire contributions within five years. The employee contributes 12 per cent of their earnings to EPF, while the government contributes another 12 per cent.

What is the difference between tax and taxation?

Is that taxation is the act of imposing taxes and the fact of being taxed while tax is money paid to the government other than for transaction-specific goods and services.

What is lifeblood theory of taxation?

The lifeblood theory constitutes the theory of taxation, which provides that the existence of government is a necessity; that government cannot continue without means to pay its expenses; and that for these means it has a right to compel its citizens and property within its limits to contribute.

Are taxes good?

Tax money helps to ensure the roads you travel on are safe and well-maintained. Taxes fund public libraries and parks. Taxes are also used to fund many types of government programs that help the poor and less fortunate, as well as many schools!

What are the four principles of taxation?

There are four general requirements for the efficient administration of tax laws: clarity, stability (or continuity), cost-effectiveness, and convenience.

What is uniformity of taxation?

Uniformity in taxation — says Black on Constitutional Law, page 292 — means that all taxable articles or kinds of property, of the same class, shall be taxed at the same rate.

What is meant by double taxation?

Double taxation refers to the imposition of taxes on the same income, assets or financial transaction at two different points of time. Double taxation can be economic, which refers to the taxing of shareholder dividends after taxation as corporate earnings.

What are the essential characteristics of tax?

– Taxation involves, and a tax constitutes, s charge or burden imposed to government, the administration of the law, or the payment of public expenses. Revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit of private persons. (Gaston vs.

What are 3 reasons we pay taxes?

The government must therefore regularly decide how much to spend, what to spend it on and how to finance its expenditure. This is the reason why we pay taxes. We all want government services such as better education, more policing and better roads. All these things cost money.

What is equitable tax?

An efficient tax system raises revenue while minimizing unintended consequences, and an equitable tax system imposes obligations on taxpayers in proportion to their resources.

What is equity of taxation?

Tax debates have long focused on the achievement of two broad dimensions of equity. Horizontal equity – ensuring that those in similar economic circumstances face similar tax burdens – reflects a belief that everyone should be treated equally under the law.

What Is Tax Evasion?

Tax evasion is an illegal activity in which a person or entity deliberately avoids paying a true tax liability. Those caught evading taxes are generally subject to criminal charges and substantial penalties.