Taxation

Photo Courtesy: Renjith Krishnan 

Taxation

We pay tax in terms of toll payments, levy, impost, duty, excise, custom, subsidy, aid etc.  

What is Tax?

Tax is a financial load to be paid by individuals to provide pecuniary support to the government. It is an unavoidable activity and in India taxes are levied by Central and state government and sometimes by local authorities.

There are two types of taxes Direct taxes and Indirect taxes.

Photo Courtesy: Renjith Krishnan 

Direct Tax

Direct tax is the one which is paid directly by the organization or entity like paying of personal property tax, real property tax, income tax or tax on personal assets.

Indirect Tax

A tax which is already included in the price tag of goods and consumers pay it by paying more for the products. Examples are sales tax, Value Added Tax (VAT), Goods and Services Tax (GST).

Income tax

It is another important category of tax that the authorities levy on the financial income of the individuals. Entities and individuals pay income tax accordingly once every year.