What is the importance of studying taxation?

What is the importance of studying taxation?

Taxing citizens is a vital method of financing the most essential public sector activities, such as the courts, the legal system, national defense and police protection. In addition, it provides the means for producing social programs, such as public health services, education and welfare.

What is the most important objective of taxation?

The primary purpose of taxation is to raise revenue to meet huge public expenditure. Most governmental activities must be financed by taxation.

What are the main functions of taxation?

The primary purpose of taxation is to raise revenue to finance government expenditure. With stable tax revenue, governments are able to provide a wide range of public goods and services such as maintaining security, constructing social infrastructure, and providing welfare services.

What are the three major types of taxes?

Tax systems in the U.S. fall into three main categories: Regressive, proportional, and progressive.

What is tax planning explain its characteristics and importance?

Tax planning is a process of analysing and evaluating an individual’s financial profile. The aim of this activity is to minimise the amount of taxes you pay on your personal income. In short, employing ways that the government has provided to save tax is a perfectly legal method to cut down your annual tax liability.

What is tax planning and types?

Tax planning: Tax planning is a process of analyzing one’s financial situation logically with a view to reducing tax liability. Tax planning involves applying various advantageous provisions which are legal and entitles the assesse to avail the benefit of deductions, credits, concessions, rebates and exemptions.

What are the important factors of tax planning?

Importance of business tax planning

• Lowering the amount of taxable income.
• Reducing the tax rate.
• Allowing greater control of when taxes get paid.
• Maximising tax relief/tax credits available.

What is tax planning in simple words?

Tax planning is the process of analysing a financial plan or a situation from a tax perspective. The objective of tax planning is to make sure there is tax efficiency. With the help of tax planning, one can ensure that all elements of a financial plan can function together with maximum tax-efficiency.

What is the scope of taxation?

SCOPE OF TAXATION OF NGAs 1. Plenary or Complete – Taxation has unlimited area of application and only restricted by the inherent and constitutional limitation. 2. Comprehensive – It has a wide scope of coverage. Taxation reaches every trade or occupation, every object of industry, and every species of possession.

How do I prepare a tax plan?

STORY OUTLINE

1. An estimate of your annual income can help you compute your expected taxable income and liability.
2. This is the ideal starting point for effective tax planning.
3. Once you have a sense of your family’s expected tax liability, you can accordingly find ways to reduce it using tax saving instruments.

What is the meaning of tax?

A tax is a mandatory fee or financial charge levied by any government on an individual or an organization to collect revenue for public works providing the best facilities and infrastructure. The collected fund is then used to fund different public expenditure programs.

What are taxes for kids?

Taxes are ways that the government can collect money from its citizens to pay for things that the people need, like schools and roads. School buses, textbooks, and buildings are paid for by tax money.

Which type of tax is income tax?

Taxes are mainly of two types,direct taxes and indirect form of taxes. Tax levied directly on the income earned is called as direct tax,for example Income tax is a direct tax. The tax calculation is based on the income slab rates applicable during that financial year.

Is income tax a direct tax?

Description: In the case of direct tax, the burden can’t be shifted by the taxpayer to someone else. These are largely taxes on income or wealth. Income tax, corporation tax, property tax, inheritance tax and gift tax are examples of direct tax.

What is the minimum salary to pay income tax?

STORY OUTLINE. The basic exemption limit for an individual depends on his/her age as well as his/her residential status. Individual taxpayers with net taxable income of up to Rs 5 lakh will continue to pay zero tax in both the tax regimes.

What happens if you dont pay income tax?

The penalty A new, section 234F, was inserted by the government into the Income-tax Act, 1961. As per this section, an individual would have to pay a fee of up to Rs 10,000 for filing income tax return after the due dates specified in section 139(1) of the Act.