What is Tax?
Let us begin by understanding the meaning of tax. Tax is a fee charged by a Government on a product, income or activity. There are two types of taxes – direct taxes and indirect taxes.
Direct Taxes: If tax is levied directly on the income or wealth of a person, then, it is a direct tax e.g. income-tax.
Indirect Taxes: If tax is levied on the price of a good or service, then, it is an indirect tax e.g. Goods and Services Tax (GST) or Custom Duty. In the case of indirect taxes, the person paying the tax passes on the incidence to another person
Let us begin by understanding the meaning of tax. Tax is a fee charged by a Government on a product, income or activity. There are two types of taxes – direct taxes and indirect taxes.
Direct Taxes: If tax is levied directly on the income or wealth of a person, then, it is a direct tax e.g. income-tax.
Indirect Taxes: If tax is levied on the price of a good or service, then, it is an indirect tax e.g. Goods and Services Tax (GST) or Custom Duty. In the case of indirect taxes, the person paying the tax passes on the incidence to another person
No comments:
Post a Comment