Taxation

 Tax is an important part of economy that is used for the development of country and common man. So the process that is used to implement tax on eligible candidates, organisation, company, industry is called taxation.

In other words we can say that the process that is used to make policy, rules, regulation, law for the implementing, executing tax inside the country. This process is called taxation.

Nature:

1. It is a universal approach.

2. It is an economical approach.

3. It is a legal activity.

4. It is a formal activity.

5. It is a progressive activity.

6. It is development oriented approach.

Objective of taxation:

There are many objectives of taxation. These objectives are as below:

1. To development of economy- Every country has an economy. It is the framework performed in which business, trade is performed according to predefined rules, regulation. Every government wants to develop economy for the development of economy. They implement taxation inside the country.

2. To raise revenue- Every government expands large amount of money in the development of infrastructure to maintain law and order condition to secure boundary or country. For this purpose they require a large amount of money taxation is the process of collecting. This amount of money.

3. Economic development- It is the third objective of taxation. Every government wants to develop their economy for the economic development, world class infrastructure requires inside the country to attract industralist, investor and so on to develop world class infrastructure inside the country, very large amount of money requires. So taxation is the process of collecting and investing money in the development kg infrastructure and make it world class infrastructure inside the country.

4. To develop infrastructure- every country has infrastructure it affects the development of business, road, railways, telecommunication, electricity are the elements of infrastructure taxation helps us to develop infrastructure if country has good infrastructure the development of business i s very fart whereas If country has poor infrastructure the development of business is poor.

5. To maintain law and order condition- the process in which peaceful environment present in any country is called law and order condition. If law and order condition is good in any country investors want to invest in such type of country. So if the law and order condition is good in any country the growth of business is high and positive in such concern country whereas if law and order condition of country is not perfect the growth of business effects. So to maintain law and order condition in any country us also important objective of taxation.

6. To maintain proper administration- there are three parts of government. These parts are executives, administrative and judiciary.

Executive- makes policy, programmes, rules, regulation inside the country.

Administrative- implement rules, regulation. Every country wants to maintain world class administration inside the country.

Types of tax:

There are two types of tax. These types are as below:

1. Direct tax- the tax that is impaired by the central government. This type of tax is called direct tax. It is collected by central government. E.g., income tax, corporate tax, wealth tax.

2. Indirect tax- the tax that is collected by the central government and gives the share to state government this type of tax us known as indirect tax. E.g., sales tax, domestic tax.

1. Income tax

2. Corporate tax- it is the second type of direct tax. It is collected by company, organisation, industry to government because all these organisation uses the resource of a country. This type of tax is collected by central government. There is no share of state government in corporate tax. The rate of corporate tax is 30%.

It is collected by government to the company of Indian origin that performs their business in the country of India whereas any Indian registered company who's headquarter is in India and perform their functions at any corner of the world they also pay corporate tax. The rate of corporate tax is also variable they pay more corporate tax. So, we can say that it is an important type of direct tax that plays an important role for the growth of India and now India is the third largest economy of the world due to corporate tax.

Central excise tax- it is also an important type of tax. It belongs to indirect tax. It is collected by organisation that performs business and it's concern firm. 

We know that there are a number of functions of business. These functions are production, demand forecasting, supplying, pricing, advertising, warehousing, communicating, trading, distributing and so on. Every function plays am important role for the development of business. Production is the first and main important function of organisation. So, central excise tax is collected on production and its concern activity. They consume the raw material like coal, petroleum, iron ore of country. So it is the obligation of organisation to provide financial return to government. So the amount they pay to government is called central excise tax.

There are two types of excise tax:

1. Central excise tax- it us collected by central government. It also depend on the transaction of company.

2. State excise tax- it is collected by state government. The rate of excise tax is variable. The minimum rate of state excise tax is 12% whereas the maximum rate of state excise tax is 20%. It depends on the transaction of the company