To run the nation wisely, the government needs to collect taxes from the people; paying taxes to the local government is an important part of everyone’s life, no matter where we live in the world. Now, taxes can be collected in any form such as state taxes, central government taxes, direct taxes, indirect taxes, and much more.

Taxes are a mandatory fees or financial charge levied by any government on an individual or on an organization to raise money for public services that provide the best resources and infrastructure. The fund is collected and used to pay for the various community programs. Failure to pay taxes or refusal to contribute will result in serious consequences under the aforesaid law. Taxes in India are divided into two categories, namely, direct tax and the indirect tax. This division depends on how taxes are paid to the government.

Types of Taxes

It can be one person or any business / organization, they all have to pay the right taxes in different ways. These taxes are categorized into direct and indirect taxes depending on how they are paid to the tax authorities.

Direct Taxes

• The definition of a direct tax is hidden in its name which means that the tax is paid directly to the government by the taxpayer
• Typical examples of this type of tax in India are Income Tax and Wealth Tax.
• In the government’s view, estimating the income tax from a direct tax is easy as it carries a direct link to the income or wealth of registered taxpayers.

Indirect Tax

• Indirect taxes are slightly different from direct taxes and the method of collection is also slightly different. This tax is based on the use in use of goods or services in the purchase and sale of goods.
• Indirect payment received by the government from the seller of goods / services.
• The seller, in turn, transfers the tax to the end user who is the buyer of the goods / service.
• Thus the name indirect tax as the end user of a good item / service does not pay tax directly to the government.
• Other examples of indirect taxes include sales tax, property tax (GST), Value Added Tax (VAT), etc.

What is income tax?

Income Tax is the most common type of tax that eligible citizens have to pay to the government. Part of the money you earn is paid to the government every year and the government uses this money to fund growth and development activities across the country.

Income Tax Deductions

Citizens with income charged more than Rs. ₹ 2.5 lakhs liable to pay income tax in terms of applicable slab. However, there are a few tax-saving options such as ELSS, Mutual Funds, PPF, EPF, saver fixed deposits, and others that can be used to reduce personal income tax. Most of these tax-saving schemes are located under sections 80C and 80D of the Income Tax Act, 1961.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

If you are interested in participating in the same, do let me know.

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If you would also like to contribute to my website, then do share your articles or poems at adv.aishwaryasandeep@gmail.com

We also have a Facebook Group Restarter Moms for Mothers or Women who would like to rejoin their careers post a career break or women who are enterpreneurs.

We are also running a series Inspirational Women from January 2021 to March 31,2021, featuring around 1000 stories about Indian Women, who changed the world. #choosetochallenge