Tax Reforms in India

April 3, 2017

Prior to the liberalization of Economy, India’s tax regime suffered numerous problems. These problems which were in vogue in 1960s and 1970s were as follows: There was a high degree of progressiveness (rich needed to pay exorbitant taxes). On the other hand, tax collection efficiency was very...

Progressive, Regressive and Proportional Taxes

April 2, 2017

There are three kinds of the taxes on the basis of their quantum / ratio of charging viz. regressive tax progressive tax and proportional or flat tax. Regressive Tax A regressive tax is the one in which tax rate decreases as the amount subject to taxation increases;...

Capital Gains Tax: Meaning & Current Government Policy

December 30, 2016

A recent speech of prime minister had started speculation that government may impose long term capital gains tax in the upcoming budget. Capital gain refers to the gain or profit from the sale of property or an investment. Investment may be in shares, equity, gold, real estate...

Implications of GST as a Destination Based Tax

December 2, 2015

Indirect taxes can be either origin based or destination based. Origin based tax (also known as production tax) is levied where goods or services are produced. Destination based tax (consumption tax) are levied where goods and services are consumed. In destination-based taxation, exports are allowed with zero...

Comparison of Direct and Indirect Taxes

November 23, 2015

There are several parameters on which the direct and indirect taxes can be compared. Firstly, direct taxes are progressive and they help to reduce inequalities but indirect taxes are regressive and they widen the gap of inequalities. Thus, direct taxes result in more equitable distribution of income...

Functions of a Budget

November 23, 2015

The key functions of a government budget are discussed below: Public Policy Document The budget serves as a public policy document expressed in money and is an embodiment of implied policy objective in monetary terms. Redistribution of Wealth The most important function of budget is redistribution of...

History of Budget in India

November 23, 2015

Etymologically, the term budget is related to Latin bulga , which refers to a ‘leather bag. The term comes from a Gaulish source connected to the Irish bolg, which means a bag. It got associated with finance in mid 18th century following up a pamphlet titled “The Budget Opened”...

Merits and Demerits of Progressive Taxation

November 22, 2015

A progressive tax is imposed to raise the tax rate effectively more than the rate at which it was applied. It is characterised by a more than proportional rise in the tax burden relative to the increase in income. Thus, progressive taxes are seen as fighting inequalities...

Exempt-Exempt Tax

November 11, 2015

Under the Exempt-Exempt Tax (EET) principle, the contributions towards certain savings are deductible from income (this represents the first ‘E’ under the EET method), the accumulation/accretions are exempt (free from any tax incidence) till such time as they remain invested (this represents the second ‘E’ under the...

Drafting the Indian Financial Code

March 13, 2015

Public saving is an important asset to the nation. It makes the biggest capital for the public spending. Throw some light on the above statement taking in course the deteriorating nature of Public savings with the help of the proposed Indian Financial Code Draft.