Category: Taxation

Treatment of Provision for Taxation and Proposed Dividends

Read this article to learn about the two treatments of provision for taxation and proposed dividends. Provision for Taxation: There are two possible treatments about the provision for taxation: 1. Provision for taxation can be treated as a current liability and it will decrease the working capital in the schedule of changes in working …...

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Provision for Taxation: Meaning, Features, Advantages and Disadvantages

Meaning: Provision for taxation is the provision made out of current profits to meet the tax obligation. There is a time gap between the provision made and payment of the actual tax liability. So it serves as a source of short-term finance during the intermediate period. Features of Provision for Taxation: Provision for taxation …...

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Main Recommendations of ‘Kelker’s Task Force, 2002’ on Direct and Indirect Taxes

Main Recommendations of ‘Kelker’s Task Force, 2002’ on Direct and Indirect Taxes! In September 2002, two task forces were set up under the chairmanship of Vijay Kelkar, the then Advisor to the Ministry of Finance and Company Affairs to recommend measure for simplification and rationalisation of direct and indirect taxes. The Task Forces submitted …...

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Salient Features of Indian Tax System | Notes

The Indian tax structure, like in any other country, has developed in response to many influences- social, political and economic. Main aspects of India’s Tax Structure: The Principle features of India’s tax structure can be briefly enumerated as follows: (1) Increasing importance of tax revenue: The tax revenue collected both by the Central …...

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Recommendations made by Chellaiah’s Tax Reforms Committee (1991) on Direct Taxes

Recommendations made by Chellaiah’s Tax Reforms Committee (1991) on Direct Taxes! The Government of India set up a high powered committee in August 1991, under the chairmanship of the Dr. Raja J. Chellaiah, a noted Public Finance Expert, to make recommendations for a comprehensive reform of the system of central taxes. It was called …...

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How to Control Pollution through Taxation?

An important beneficial effect of a tax on social welfare is when it is imposed on the activities which cause pollution of environment. The production of an industry which pollutes air or water causes external diseconomies which harm others but polluting industries do not pay for them. In this case the marginal social cost …...

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The Merits and Demerits of Indirect Taxes (explained with diagram)

Indirect taxes such as excise duties and sales tax are important source of revenue for the Government. The revenue from indirect taxes has shown a great deal of buoyancy. In India revenue from indirect taxes has been continuously increasing. In Table 31.1 given below we give the tax revenue raised from direct and indirect …...

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The Merits and Demerits of Direct Taxes (explained with diagram)

A controversial issue in public finance is concerned with whether in tax structure of an economy direct or indirect taxes should be preferred. Indeed, both direct taxes and indirect taxes have their merits and demerits and therefore a good tax system should contain a proper mix of these two types of taxes. Direct taxes, …...

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The Merits and Demerits of Indirect Taxes (explained with diagram)

Indirect taxes such as excise duties and sales tax are important source of revenue for the Government. The revenue from indirect taxes has shown a great deal of buoyancy. In India revenue from indirect taxes has been continuously increasing. In Table 31.1 given below we give the tax revenue raised from direct and indirect …...

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The Principle of Equity in Taxation – Explained!

The Principle of Equity in Taxation ! An important question widely discussed in public finance is what kind of tax system is fair, just or equitable. As seen above, equity in taxation was the first canon of taxation on which Adam Smith laid a good deal of stress. A fair tax system is not …...

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