- Tax constitutes a mandatory financial levy imposed by the government on individuals or businesses to support public spending. Typically determined as a percentage of income, sales, or property value, taxes play a vital role in funding essential public services like infrastructure, education, and healthcare.
What is the functioning of taxation in India?
In India, the government gathers revenue from individuals and businesses via diverse taxes such as income tax, goods and services tax (GST), customs duties, among others. These funds play a crucial role in supporting public services, infrastructure, and overall economic development.
Type of taxes in India
India levies various types of taxes, including:
1. **Income Tax:** Imposed on individuals and businesses based on their income.
2. **Goods and Services Tax (GST):** A comprehensive indirect tax on the supply of goods and services.
3. **Customs Duty:** Levied on goods imported into or exported from the country.
4. **Corporate Tax:** Applied to the profits of companies and businesses.
5. **Excise Duty:** Tax on the production or sale of certain goods.
6. **Service Tax:** Applied to specific services provided.
7. **Property Tax:** Levied on the value of real estate holdings.
8. **Wealth Tax:** Previously imposed on the net wealth of individuals, but it was abolished in 2015.
These taxes contribute to the government’s revenue and support various public initiatives and services.