We all know that the taxes are the main source of the government revenue. They come in two forms- one is direct and other is indirect taxe. Direct taxes are something special because every person of the country facing these issues of direct taxes. I will tell you most 5 things about Direct taxes.
1. Lower Rate is Better
If the rate of direct tax is low then more people want to pay their taxes honestly. But if the rate of direct tax is high then the people want to steal taxes. A very high rate could lead to people paying a lower amount of tax as they will look for ways t oreduce their burden.
2. Nature of Taxes
There are mainly two types of Direct Tax-
i. Income Tax
ii. Wealth Tax
Direct taxes lead to a reduction in the net amount of earned income available with the individual or entity. The tax is levied on the income earned by an individual or an entity.
3. Importance of Increasing
This is good things to the country that the direct tax is rapidly increasing year by year.
i. Financial Year 200-01- Direct taxs contributed 36% of the total tax revenue.
ii. Financial Year 2012-13– Direct taxes contributed 52% of the total tax revenue.
4. Action of Income Tax
Income tax has very importance for the direct tax, that is paying by the tax payers. On specific rate of income tax, the amount pay to the country on their earning.
i. For Salaried- Salaried individuals have the tax deducted from their salary.
ii. For Professionals- For Professionals tax is deducted on the receipts thet they get.
5. Levy’s Conditions
There is a clear relationship between some certain condition and levy of the tax, in case of direct tax.
Income Tax- the earning of a taxable income gives rise to the levy of the tax.
Wealth Tax- It has to be wealth of the individual beyond the certain limit. The levy directly affects the direct tax for any person.
I think you will like this article, Since this is related to the direct tax facts and income tax is also includes in the direct tax. Income tax affects everyone. If you have any comments or any query then you may comment.