Date : 16 Mar, 2019
Post By admin
is a term for when a taxing authority, usually a government, levies or imposes a tax. The term "taxation" applies to all types of
involuntary levies, from income to capital gains to estate taxes. Though
taxation can be a noun or verb, it is usually referred to as an act; the resulting revenue is usually called
Different Types of Taxation:-
Income tax: Governments impose income taxes on
financial income generated by all entities within their jurisdiction, including
individuals and businesses.
Corporate tax: This type of tax is
imposed on the profit of a business.
Capital gains: A tax on capital gains is imposed on any capital gains or profits made by people or businesses from the sale of certain assets including stocks, bonds, or real estate.
Property tax: A property tax is asses by a local government and paid for by the owner of a property. This tax is calculated based on the property and land values.
Inheritance: A type of tax levied on individuals who inherit the estate of a deceased person.
Sales tax: A consumption tax imposed by a government on the sale of goods and services. This can take the form of a value-added tax (VAT), a goods and services tax (GST), a state or provincial sales tax or an excise tax.
Benefits of Taxes:
Even though most people are always at odds with the idea of taxation, there are
some advantages to taxes, the least of which is that it provides the government
the resources it needs for economic development. Some of the other benefits of
It encourages savings and investments because if a person invests in certain instruments, then the amount invested is reduced from their taxable income thus bringing down the tax they have to pay. This investment is subject to certain limits that are detailed in the IT Act.
Paying taxes means that you have to file your tax returns which in turn means that when you apply for a home loan for that home loan, it’s easier to get it because one of the things many banks require is proof that you have been filing taxes regularly.
Taxation law covers the rules, policies and laws that oversee the tax process, which involves charges on estates, transactions, property, income, licenses and more by the government. Taxation also includes duties on imports from foreign countries and all compulsory levies imposed by the government upon individuals for benefit of the state.
A tax lawyer will be able to identify key deductions, exemptions, and credits that could make a significant impact on your tax burden. In addition, a tax lawyer will be able to advise you on the type of tax-related activities that are illegal or that may trigger an audit by the IRS.
If you fail to file taxes or file your taxes improperly, you may need a lawyer to represent your interests. The IRS not only audits taxpayers who are under suspicion or who made errors in their paperwork, but also those who are part of a group targeted for greater scrutiny. If you become the subject of an IRS audit, you may want to consult with an attorney about the best course of action.