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A tax may be defined as a pecuniary (financial) burden laid upon individuals or property to support the Government, payment exacted by legislative authority. A tax is not a voluntary payment or donation, but enforced contribution, exacted pursuant to legislative authority and is any contribution imposed by government. Tax is a compulsory payment made to government, whether union, state or local. In other words, taxation is the imposition by a government of a compulsory contribution on its citizens for meeting all or part of its expenditure. Imposition of any tax requires two things: 1. One, the tax base,i.e., the object that will invite tax, such as, income, whether sales, production of goods, services, employment, etc., 2. Two, the rate structure, i.e., whether the tax rate will be uniform on the entire tax base or different on different slabs of the tax base. It does not entitle the tax payer to any preferential treatment in the matter of Govt.services or benefits. Use of the tax revenue is to provide benefits and services to the public, without discrimination in favor of taxpayers. Tax payment may be in cash or kind. Ordinarily, tax payment is in cash. However, it may also be in kind , for example, when the Government acquires any asset or purchases goods below the market price, or uses its monopolistic position to charge excess price for goods or services provided by it.
Revenue:
Taxes raise money to spend on roads, schools and hospitals, and no more indirect Government functions like market regulation or legal systems. This is the most widely known function.
Redistribution: Normally, this means transferring wealth from the richer sections of
society to poorer sections.
Reprising:
Taxes are levied to address externalities: tobacco is taxed, for example , to discourage smoking, and many people advocate policies such as implementing a carbon tax.( It is an example of a pollution tax).
Representation:
Several studies have shown that direct taxation(such as income taxes) generates the greatest degree of accountability and better governance, while indirect taxation tends to have smaller effects.
which the State governments can levy), Custom duties, Central Excise and Sales Tax (tax on intra-state sale of goods ), Stamp duty ( duty on transfe of property), State Excise ( duty on manufacture of alcohol), Land Revenue(levy on land used for agricultural /non-agricultural purposes),Duty on Entertainment and Tax on Professions. The goods for use / consumption within areas of the Local bodies ), tax on markets and Tax/user charges for utilities like water supply , drainage, etc. Since 1991 tax system in india has undergone a radical change , in line with liberal economic policy and WTO commitments of the country. Some of the changes are: Reduction in customs and excise duties Lowering corporate tax
Cess:
It is an additional charge computed with reference to the amount of tax. Toll Tax: It is the tax on using a bridge , road, or selling goods in a market.
Rates :
They are tax on occupiers / owners of property within the area of a local government.They may include fare, charge or other payment for carriage of passengers, animals or goods.
Octroi :
It is the tax on goods brought for sale or consumption within the area of a local government. They may include fare , charge or other payment for carriage of passengers, animals or goods. Fee: Charge of any fee is to compensate the Government for expenses incurred by it to render services of a specific nature to the payers of the fee. Levy and collection of fee does not need authority of statutory law passed by legislature, as in case of income
tax(parliament) or General sales tax (state legislature) . Moreover, payment of fee involves a quid pro quo. The payer receives a specific service or benefit in return for payment.