Quick Answer: What Are The Objectives Of The Tax Law?

What are the general principle of taxation?

Taxation is the inherent power of the sovereign, exercised through the legislature, to impose burdens upon subjects and objects within its jurisdiction for the purpose of raising revenues to carry out the legitimate objects of government..

What is tax planning explain its characteristics and importance?

There are three key characteristics of tax planning—investing to reduce taxes; planning your finances in such a way that you attract the least amount of tax, and the process of tax filing. As a result, tax planning affects all aspects of your money matters.

How does taxation work?

Income up to the standard deduction (or itemized deductions) is thus taxed at a zero rate. Federal income tax rates are progressive: As taxable income increases, it is taxed at higher rates. Different tax rates are levied on income in different ranges (or brackets) depending on the taxpayer’s filing status.

What are the two main principles of taxation?

These are: (1) the belief that taxes should be based on the individual’s ability to pay, known as the ability-to-pay principle, and (2) the benefit principle, the idea that there should be some equivalence between what the individual pays and the benefits he subsequently receives from governmental activities.

What are the elements of taxation?

ESSENTIAL ELEMENTS OF A TAXIt is an enforced contribution.It is generally payable in money.It is proportionate in character.It is levied on persons, property, or the exercise of a right or privilege. … It is levied by the State which has jurisdiction over the subject or object. … It is levied by the law-making body of the State.More items…•

What are the principles of a good tax?

In The Wealth of Nations (1776), Adam Smith argued that taxation should follow the four principles of fairness, certainty, convenience and efficiency. Fairness, in that taxation should be compatible with taxpayers’ conditions, including their ability to pay in line with personal and family needs.

What are the benefits of tax planning?

There are benefits of tax planning for both large and small businesses and planning plays an important role in:Lowering the amount of taxable income.Reducing the tax rate.Allowing greater control of when taxes get paid.Maximising tax relief/tax credits available.

What is tax planning explain its objectives?

Tax planning can be used to ensure that funds from taxable sources are diverted to income-generating plans. The main aim is to use productive investment planning to come up with the most beneficial tax saving options.

What are the three function of taxation?

Taxation has three main functions: fiscal, regulatory and stimulating.

What is taxation in your own words?

Taxation refers to the practice of a government collecting money from its citizens to pay for public services. … Taxation is the practice of collecting taxes (money) from citizens based on their earnings and property.

What is taxation process?

Introduction. Taxation is the means by which a government or the taxing authority imposes or levies a tax on its citizens and business entities. From income tax to goods and services tax (GST), taxation applies to all levels.

What is tax planning and types?

Tax planning: Tax planning is a process of analyzing one’s financial situation logically with a view to reducing tax liability. … Tax planning involves applying various advantageous provisions which are legal and entitles the assesse to avail the benefit of deductions, credits, concessions, rebates and exemptions.

What are the main objectives of taxation?

The primary purpose of taxation is to raise revenue to meet huge public expenditure. Most governmental activities must be financed by taxation.

What is taxation and its purpose?

Taxation, imposition of compulsory levies on individuals or entities by governments. … Taxes are levied in almost every country of the world, primarily to raise revenue for government expenditures, although they serve other purposes as well.