Understand about Tax

Understand about Tax

Understand about tax why I choose this content because the most people didn’t know what is tax and why government tax-collecting from peoples so I thought I want to share something to you piece of knowledge about the tax. “Tax means the certain percentage of the amount paid to the government for the economic development of the country” this is the simple definition of the tax. Taxation is a process that process have to done correctly then only the economy works properly. Most people consider the tax as unwanted expenses this is the major problem of most people the government collecting tax and that is using for the country development you need to understand that well that. Tax is government revenue government which means people so we are paying taxes to our development so the taxpaying is also create impact in the economic growth of the country. The taxpaying is an obligation of every individual you have to keep in mind always don’t consider the tax like an unwanted expense. When everyone pays the tax properly then that country will develop automatically.

Types of taxes

The tax has two types is Direct tax and another one is an indirect tax.

1. Direct tax

The direct tax which is collecting directly from the people the personal income tax, corporate tax, wealth tax are examples of direct tax.

Indirect tax

which is collecting from the people indirectly the tax will collect through the product and services the Goods and services tax is an example of indirect tax.

When have to pay the direct tax and indirect tax

When have to pay the direct tax? this is common doubt of most people’s when the financial year is ended the person have to pay the income tax for the last financial year this is the direct tax collecting method. But indirect tax is collecting every buy and selling time this is the difference of collecting method of two taxes.

Who has to pay the tax?

The tax has to pay individuals, HOF (Hindu undivided family), the body of individuals, business firms, Local authorities, artificial judicial person, Association of person, etc. these peoples are liable to pay the tax.

How the tax is collecting

Tax can pay voluntarily the paying person can pay through designated banks and also through other tax collecting sources.

What is the advantage of tax-paying?

The taxpaying is an obligation of every tax payable person the paying tax amounts will use for economy infrastructure developments and also country other developments. Tax is the revenue of government that revenue will return to the peoples through the country developments and also other necessary things.

What will happen if the person does not pay the tax

If the person does not pay the tax into government that is an offence and also it will affect the country development the Black money will create automatically. Tax is necessary for country development and also the economic condition of that country so if you are liable to pay the tax pay it immediately.

Types of income taxes

Here have five types of income taxes like income from salary, income from rental, income from a business, capital gains, and other income sources.

Income from salary – This tax will be deducted directly from employee salary.

Income from business – Here the tax has to pay from the business

Capital gains- If any capital source sold then the person will get the gain from there here the person has to pay the tax for this.

Income from rental – Here the person has any rental income sources like a house, cars, and others he/she has to pay the tax for that.

Others- Others which mean stocks, dividends, etc. if the person has stocks, bonds and other financial securities then he/she is liable for the taxpaying.

What is GST

Goods and services tax is the expansion of GST this tax have to pay all buyers and sellers who provide goods and services in the business model they have to pay this GST. Every commodity in the market included GST this not only applies to commodities if you purchased any courses or other services then you need to pay the GST amount too. This GST is an indirect tax this is collecting from every individual indirectly.

How to get tax benefits

You can get tax benefits from business and some investments because business has many expenditures direct and also indirect so while calculating the net profit the maximum amount will go in major expenses of business so the businessman will get tax relaxations.

Conclusion

The tax has two types direct and indirect direct tax is collecting directly from that person indirect tax is collecting indirectly from the people like GST. All Individuals have to pay the tax for the government the personal income tax has to pay who is liable for tax paying. Here the business owners will get some reductions from the taxpaying and some investments are also having tax reductions like sovereign gold bond schemes are giving tax reductions after the maturity time of the scheme so investors have to choose tax reduction schemes always.

I hope this content you understand well.

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