Category: Tax

10 Tax Benefits available to Small-Scale Industries in India

Some of the tax benefits available to Small-Scale Industries in India are as follows: Tax Holiday: Under section 80J of the Income Tax Act 1961, new industrial undertakings, including small-scale industries, are exempted from the payment of income- tax on their profits subject to a maximum of 6% per annum of their capital employed. …...

Read More >>

Direct Taxes: 6 Significance of Direct Taxes: Explained!

Direct Taxes: 6 Significance of Direct Taxes: Explained! In advanced countries, direct taxes account for a major part of the aggregate tax revenue. In the U.S.A., for instance, more than 75 per cent of total tax yield is received through direct taxes. In the U.K., direct taxes account for nearly 60 per cent …...

Read More >>

Direct Taxation: 7 Important Merits of Direct Taxation – Explained!

Some of the merits of direct taxation are: 1. Equity 2. Progressive 3. Productive 4. Certainty 5. Economy 6. Educative 7. Anti-inflationary! 1. Equity: Direct taxes like income tax, wealth tax, etc. are based on the principle of ability to pay, so the equity or justice in the allocation of tax burden is well …...

Read More >>

Direct Taxation: 7 Demerits of Direct Taxation – Explained!

Demerits of direct taxation are: 1. Pinching 2. Inconvenient 3. Evasion and Corruption 4. Uneconomical 5. Narrow based 6. Arbitrary 7. Disincentiveness. 1. Pinching: Since direct taxes are to be paid in a lump-sum they pinch the tax payers more. Thus, the announcement effect of a direct tax always tends to cause resentment …...

Read More >>

Taxation Types: Proportional, Progressive, Regressive and Digressive Taxes

Taxation Types: Proportional, Progressive, Regressive and Digressive Taxes! Considering the relation between the tax rate and the tax base (income), there can be four types of taxation, viz.: (i) Proportional taxes, (ii) Progressive taxes, (iii) Regressive taxes and (iv) Digressive taxes. Proportional Taxes: Taxes in which the rate of tax remains constant, though the …...

Read More >>

Indirect Taxation: 8 Merits of Indirect Taxation – Explained!

Some of the merits of indirect taxation are: 1. Convenient 2. Less Pinching 3. Not Easily Evadeable 4. Broad based 5. Social Value 6. Forced Saving 7. Complementary 8. Progressive. 1. Convenient: Indirect taxes are more convenient to pay. These taxes, generally being on commodities, are wrapped up in prices; hence the tax …...

Read More >>

Comparison between Direct and Indirect Taxes (With Figure)

Comparison between Direct and Indirect Taxes (With Figure)! Allocative Effect: It has been observed that the allocative effects of direct taxes are superior to those of indirect taxes. If a particular amount is raised through a direct tax like income tax, it would imply a lesser burden than the same amount raised through …...

Read More >>

Indirect Taxes: 7 Significance of Indirect Taxes – Explained!

Indirect Taxes: 7 Significance of Indirect Taxes – Explained! In advanced countries, indirect taxes have relatively less significance in their tax structure. On an average, indirect taxes in these countries account for less than 40 per cent of the total tax revenue. In developed countries, the purpose of indirect taxes is to catch the …...

Read More >>

Incidence of Taxation: What is the Meaning of Incidence of Taxation?

Incidence of Taxation: What is the Meaning of Incidence of Taxation? – Answered! When a tax is imposed on some person, it is quite possible that it may be transferred by him to a second person, and this tax may be ultimately borne by this second person or transferred to others by whom it …...

Read More >>

Effects of Taxation on the Desire to Work, Save and Invest | Taxation

Effects of Taxation on the Desire to Work, Save and Invest! It is generally assumed that all taxes have a disincentive effect in this regard, but the relation between taxation and incentive to work, save and invest is not so simple. The effects of taxation on the desire to work, save and invest, …...

Read More >>