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Introduction about Tax and why Government collects Taxes in India

Before begin to learn Tax, it is better to understand the Meaning of Tax and why the Government is Collecting or Levies Tax on Individuals, Firms, and Companies. In general, Tax is nothing but a kind of fee to be payable on a product, services (financial activities) and Income earned. At present, there are different kinds of Taxes are being operated by the Central and State level Governments in India. Government involvement in the Tax imposition varies based on the Tax Type. As per the nature of Tax it will be imposed by the Central Government of India or respective State Governments or similar other functional equivalents in the State such as Municipal Corporations. Tax Amendments, Computation Methods, and Imposition of varied taxes across the country are carried on only by the Ministry of Finance's Department of Revenue.

What are the Different Taxes available in India?

Classification of Taxes in India

Finance Ministry of India will make proper amendments, issues notification for better management of Taxes India. In India Taxes are broadly divided into two types.

  1. Direct Tax
  2. Indirect Tax

Why the Government Collects the Tax from the people?

A layman blames the government about the levy of tax and they don’t know the reason why the Taxes are collected. Basically, taxes are collected for making the better social environment through public services for that Government will bear some expenditures for Administration, Infrastructure, free Services to the public such as Free Hospitals, Subsidies. As well in this competitive world every country has to protect their land from the other counties. So, it needs the army force so that it need huge money for the security purpose.

I have just outlined major expenditure of the Governments. Even there are some many things involved in that all those are to be paid off by the people of the country finally. So, it imposes the different kinds of Taxes on different kinds of Profit earning Individuals, Social Organizations, Companies, and even from Government Bodies as well. So, be the responsible Tax Payers and not evade the tax. Pay tax on time and support for the development of nation.

is the founder of AccountsGuy.Net with the view of providing Accounting and Technical support using Accounting package Tally ERP 9, and Office Tools to the people. I write articles on Accounts, Blogging, Computer Operating, and technical issues and some of my experiences on them for students, beginners. Follow our Networks or sing-up for the email newsletter below for your daily dose of Tips and Tricks.
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