Importance Of Taxation In India

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The Government needs money for the performance of a variety of functions. Funds required to finance its activities are raised from various sources. The income of the government through all sources is called public income. A welfare government is therefore justified in raising large revenue from its people. It is an essential fiscal treasure for achieving social justice and economic equality. Taxation constitutes the most important source of revenue for the government. Tax revenue refers to the funds raised by the government from all kinds of taxes. Taxes have been classified on the basis of form, Direct Taxes and Indirect Taxes. A direct tax is that whose burden is borne by the person on whom it is levied. An indirect tax paid by one individual, but the burden of which is borne by another individual is referred as indirect tax. Tax system plays an important role in National Growth. For the development of economy, indirect tax plays a very important role and its effects on both production and consumption. In India also various indirect taxes are source of Income. At present Indian government decided to modernize and streamline its indirect taxation pattern. There are several indirect taxes are their which already succeeded in several countries by implementation. In the indirect taxes Goods and Services Tax is popular. In India VAT(Value Added Tax) is presently popular indirect tax. Our Nation having well developed tax structure with clearly demarcated authority

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