What is Tax - Definition & Types of Taxation in India
What is Tax?
A tax is a mandatory fee or financial charge levied by the government on an individual or organization to collect revenue for public works and services. The collected revenue is used to fund various government expenditures, including social welfare programs, infrastructure development, national defense, and public safety.
Types of Taxation in India
There are two main types of taxes in India: direct taxes and indirect taxes.
Direct taxes
Direct taxes are levied directly on the income or wealth of a taxpayer. These taxes are paid by the taxpayer to the government. Some examples of direct taxes in India include:
- Income tax
- Corporation tax
- Capital gains tax
Indirect taxes
Indirect taxes are levied on the consumption or sale of goods and services. These taxes are usually collected by the seller from the customer and then paid to the government. Some examples of indirect taxes in India include:
- Goods and Services Tax (GST)
- Customs duty
- Excise duty
For more information on the Indian tax system, you can visit the website of the Income Tax Department of India https://www.incometax.gov.in/iec/foportal/.
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