All About Taxes
Hey Teens! Wanna know more about types of taxes and the way they function? Let’s get started in here
Taxes :
When you earn any amount of money, which is your income, you must pay the government something called an ‘income tax’ on it.
Why should we pay taxes to the government?
As responsible citizens of the country, we must pay our taxes timely to the government.
The government provides us a lot of facilities and services for which it too, requires money. One of the ways of collecting money for these things is through taxes. In a way, we are paying the government so that it can take care of us.
Who should pay taxes? All salaried people?
The government has certain rules to help decide who should pay taxes and who shouldn’t. They have set an amount below which, a person does not need to pay any tax amount whatsoever. Anybody who earns above that amount, has to pay income tax
The Need for such limits
People have basic needs to take care of for themselves and their families. So, the government says that anyone who earns less than the limit set by them, isn’t earning enough to support their daily needs, the needs of their families and also be able to pay tax
Do all people pay the same amount of tax?
Since different people earn different amounts, they have to pay different amount of taxes to the government.
Everybody who earns an income, has some amount of tax to pay according to the government’s rates. As your income increases, the amount of tax to be paid increases too
Do companies pay taxes?
Yes, when we talk about business, all of them have to pay taxes if they are making a profit. Even if a company profits on one rupee, they have to pay taxes for it too.
Other types of taxes :
- Wealth Tax
- Property Tax
- Professional Tax
- GST(most widely paid)
GST :
GST stands for Goods and Services Tax. It is the tax that we pay when we buy goods or take services from someone. It was introduced in India in 2017
Distribution of Taxes :
Income tax goes to the Central Government of India. GST, on the other hand, is divided equally between the Central and State Government. That’s why if you see any bill, you will see the total GST is written twice, as CGST or Central Government GST, and SGST or State Government GST.
Exceptions for Tax :
Water and electricity are exempt from GST. No tax is charged for either of these. But, there is GST on telephone bills and television subscriptions
Honestly, I was supposed to post a blog on some other topic. But I was too lazy to do that, so I ended up posting this one.
Note : I intend to share what I learn through this blog. Since these are mostly notes, I have tried not to be extra creative with my sentences. The phrases are mostly extracted from the source, as they were. Due credits go to TCSiON Reference Material for Financial Literacy