Taxation

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90 Taxation Questions And Answers

11⟩ What do the taxation principles include?

These include:

Adequacy:

Taxes should be just enough to generate revenue required for provision of essential public services.

Broad Basing:

Taxes should be spread over as wide as possible section of the population or sectors of economy, to minimize the individual tax burden.

Compatibility:

Taxes should be coordinated to ensure tax neutrality and overall objectives of good governance.

Convenience:

Taxes should be enforced in a manner that facilitates voluntary compliance to the maximum extent possible.

Earmarking:

Tax revenue from a specific source should be dedicated to a specific purpose only when there is a direct cost and benefit link between the tax source and the expenditure, such as use of motor fuel tax for road maintenance.

Efficiency:

Tax collection efforts should not cost an inordinately high percentage of tax revenues.

Equity:

Taxes should equally burden all individuals or entities in similar economic circumstances.

Neutrality:

Taxes should not favor any one group or sector over another and should not be designed to interfere-with or influence individual decisions making.

Predictability:

Collection of taxes should reinforce their inevitability and regularity.

Restricted exemptions:

Tax exemptions must only be for specific purposes (such as to encourage investment) and for a limited period.

Simplicity:

Tax assessment and determination should be easy to understand by an average taxpayer.

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12⟩ What is professional Taxation?

Professional taxation, also known as an occupation taxation or a professional privilege taxation, is a taxation that a professional must pay to receive the right to practice a professional service. Professional taxation regime produces manually prepared taxation challans for business entities on annual basis. Criteria for calculating professional taxation is fixed, depending upon number of directors, employees and paid-up capital and annual turnover of establishment.

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13⟩ What is motor registration fee and taxation?

Motor vehicle Tax is levied on every motor vehicle registered in any district with registration fee. Vehicle registration involves the recording of a motor vehicle in the official records after due verification. Vehicle registration is mandatory/compulsory under the law and is essential to prove the ownership of a vehicle. It is also required during the sale of a vehicle and transfer of its ownership.

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14⟩ Tell me what is hotel taxation?

Assessment for hotel tax is made during every financial year on the basis of return documents filed, inspection carried by the field staff and after giving the representative of the hotel an opportunity of being heard. Assessment order is issued and demand is raised in demand register.

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15⟩ Tell me about infrastructure cess taxation?

Infrastructure Cess tax regime is applicable to all the goods entering the province through sea or air. A Cess @ 0.85% (@0.125% of Gold only) is levied on the C and F value of goods as determine by the customs department.

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16⟩ What is the aim of taxation papers?

The aim of the "Taxation papers" is twofold:

☛ To facilitate the spreading of the analysis of the Commission's Taxation and Customs Union.

☛ To contribute to the debate on taxation in the European Union.

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17⟩ Tell me what is a property taxation?

The levy and collection of property tax on lands and buildings. Property taxation is levied on lands and buildings declared as rating areas by the government. Property Taxation is one of the major taxes collected by the department.

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19⟩ Tell me what is taxation without representation?

The taxation without representation refers to the inhabitants of the colonies being taxed by the government despite not having a representative government official to express the views of the citizens of the colonies.

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20⟩ What does government use taxation for?

Governments use taxation to encourage or discourage certain economic decisions. For example, reduction in taxable personal (or household) income by the amount paid as interest on home mortgage loans results in greater construction activity, and generates more jobs.

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