Money plays an important role in an economy. It is important to manage money and monetary resources effectively to ensure that the economy of the country works smoothly. This can be done when the money is circulated properly. People make money through different modes and means and governments collect some part of it and use it for the development of the country. This money is mostly collected in the form of tax. If you do not know much about it, then read this article and get to know the basic of the fundamental of the taxation system.
A tax is basically a certain percentage of the total value of product or services that is being levied by the government. The government needs money to execute different plans and it gets this money through taxes. These are levied on products, services and also on individuals. Depending on the nature of tax, they can be categorized into different types . The most popular tax that people have to pay is called Income Tax. Apart from it, there are others like professional tax, property tax, water tax, and other kinds of taxes that are levied it on products and services.
The amount and the percentage of tax vary from different product services and individuals. The government has the right to collect the tax as per the rules and regulations. The government can also increase or decrease or relax them in certain cases. The purpose of these taxes is to get the money back in circulation and also utilize those funds in the development of the country.
An income tax is levied on the total income of a person or a company. It is calculated by following a particular procedure and there is a certain amount of relaxation income as well. In case of loss, you need not pay any tax. However if you make this and profit from business, then you have to pay a certain amount of it to the government in a form of tax.
As a responsible citizen, it is our duty to pay tax on time and be honest with their payment. At the same time, it is also the duty of the government to ensure that the tax that is collected is utilised properly without any corruption or negligence. If this can be done effectively, then this would serve the country and help in the overall development of the country.