Union Budget 2019: Direct taxes form about 50% of govt's revenue; help curb inflation, maintain socio-economic balance
Direct taxes are considered to be very productive, the reason being, as the working population and community grow, so do the returns from direct taxation.
Taxes such as income tax, poll tax, land tax, and personal property tax are examples of direct taxes
Direct tax is calculated on the basis of the ability of a taxpayer to pay
The CBDT is the hub and nexus of all the direct tax-related news and enforcement
Direct taxes are taxes which an individual or an organisation pays directly to the government. Direct tax is imposed directly and cannot be transferred to any other entity for payment. For instance, income tax, land tax, and personal property tax.
The government's two main revenue sources are direct and indirect taxes. Direct taxes form about 50 percent of the government's revenue share every fiscal.
The government sets direct tax collection targets for every financial year to enhance revenue.
The revised estimate for direct tax collection for 2018-19 was hiked by Rs 50,000 crore from the Budget estimate of Rs 11.50 lakh crore. The government had managed to meet its direct tax collection target in 2017-18 with the actual mop-up at Rs 10.02 lakh crore.
The contribution of direct taxes in the total tax collection in 2016-17 has fallen below 50 percent to 49.66 percent for the first time since 2006-07.
Direct tax is calculated on the basis of the ability of a taxpayer to pay, which means that the higher his capability of paying is, the higher his taxes are.
The direct taxation is overseen by Central Board of Direct Taxes in India (CBDT). The CBDT, which is responsible for the administration of the direct tax laws, was formed as a result of the Central Board of Revenue Act, 1924. It is part of the revenue department coming under the Union finance ministry.
The CBDT is the hub and nexus of all the direct tax-related news and enforcement. The body is headed by a chairman consisting of 6 members who are also special secretary to the government.
Advantages of direct taxes
Direct taxes have certain advantages for a country’s social and economic growth.
It controls inflation: The government will often go for a tax hike when there is inflation. This move, in turn, brings down the demand for goods and services. As a result of a dip in demand, inflation is bound to compress.
Socio-economic balance: On the basis of every individual’s earnings and overall economic situation, the government has well-defined tax slabs and exemptions in place so that the income inequalities can be balanced out.
Certainty: There is a sense of certainty with respect to direct taxes from the taxpayer and the government, as each knows how much to pay and how much to expect to collect respectively.
Productivity: Direct taxes are considered to be very productive, the reason being, as the working population and community grows, so do the returns from direct taxation.
Equal distribution of wealth: The money is equally distributed as the government charges more taxes from those who can afford and this money is used for the benefit of the poorer sections of the society.
Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.
Hisense debuts in India with an impressive smart TV series that offers great value for money and is one of the best in sound output.
One Trump enterprise that has been regularly profitable and is a persistent source of concern about ethical conflicts and national security lapses, is the Mar-a-Lago club