News By/Courtesy: Kasturi Nandi | 25 Oct 2020 15:46pm IST

HIGHLIGHTS

  • Indian Tax and Law
  • Indian Tax and Law
  • Indian Tax and law

INDIAN TAX AND LAW

Tax law or revenue law is an area of legal study in which public or sanctioned authorities, such as federal, state, and municipal governments (as in the case of the US) use a body of rules and procedures (laws) to assess and collect taxes in a legal context. The rates and merits of the various taxes, imposed by the authorities, are attained via the political process inherent in these bodies of power, and not directly attributable to the actual domain of tax law itself.

Tax law is part of public law. It covers the application of existing tax laws on individuals, entities, and corporations, in areas where tax revenue is derived or levied, e.g. income tax, estate tax, business tax, employment/payroll tax, property tax, gift tax, and exports/imports tax. There have been some arguments that consumer law is a better way to engage in large-scale redistribution than tax law because it does not necessitate legislation and can be more efficient, given the complexities of tax law.

  • Taxes can fail to raise sufficient revenue to cover government spending.

  • Taxes are generally complex and can be viewed as benefitting high-income earners more than they do to lower-income earners (in the payment of relatively less tax).

  • Tax evasion and avoidance occur, leading to reduced government revenue.

  • Taxes can produce poor desired outcomes (lower productivity and provide less incentive for businesses to grow). 

  • Taxes can curb economic growth through inefficiency, e.g. corporate taxes/hurdles that could impede smaller entities to grow. 

  • Taxation can be viewed as disproportionate, as in the case of the taxation of capital gains versus labor income, in which investors generally pay less tax on investment income vs workers who proportionally pay more on their wages.

  • Taxes can remain questionable in achieving desired goals, such as the Ecotaxwhich is primarily intended to promote environmentally friendly activities via economic incentives. 

A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a Governmental Organization in order to fund Government spending and various public expenditures. A failure to pay, along with evasion of or resistance to taxation, is punishable by law. Taxes consist of direct or indirect taxes and may be paid in money or as its labor equivalent. The first known taxation took place in Ancient Egypt around 3000–2800 BC.

  • Most countries have a tax system in place to pay for public, common or agreed on national needs and government functions. Some levy a flat percentage rate of taxation on personal annual income, but most scale taxes based on annual income amounts. Most countries charge a tax on an individual's income as well as on corporate income. Countries or subunits often also impose wealth taxes, inheritance taxes, estate taxes, gift taxes, property taxes, sales taxes, payroll taxes, or tariffs.

  • In economic terms, taxation transfers wealth from households or businesses to the government. This has effects that can both increase and reduce economic growth and economic welfare.

  • Law is a system of rules created and enforced through social or governmental institutions to regulate behavior, with its precise definition a matter of longstanding debate. It has been variously described as a science and the art of justice. State-enforced laws can be made by a group legislature or by a single legislator, resulting in statutes;

 By the executive through decrees and regulations; or established by judges through precedent, usually in common law jurisdictions. Private individuals may create legally binding contracts, including arbitration agreements that adopt alternative ways of resolving disputes to standard court litigation. The creation of laws themselves may be influenced by a constitution, written or tacit, and the rights encoded therein. The law shapes politics, economics, history, and society in various ways and serves as a mediator of relations between people.

  • Legal systems vary between countries, with their differences analyzed in comparative law. In civil law jurisdictions, a legislature or other central body codifies and consolidates the law. In common law systems, judges make binding case law through precedent, although on occasion this may be overturned by a higher court or the legislature. Historically, religious law influenced secular matters and is still used in some religious communities. Sharia law based on Islamic principles is used as the primary legal system in several countries, including Iran and Saudi Arabia.

 

  • Law's scope can be divided into two domains. Public law concerns government and society, including constitutional law, administrative law, and criminal law. Private law deals with legal disputes between individuals and/or organizations in areas such as contracts, property, torts/delicts, and commercial law. This distinction is stronger in civil law countries, particularly those with a separate system of administrative courts; by contrast, the public-private law divide is less pronounced in common law

  • Law provides a source of scholarly inquiry into legal history, philosophy, economic analysis and sociology. Law also raises important and complex issues concerning equality, fairness, and justice.

 

 

 

This article does not intend to hurt the sentiments of any individual, community, sect, or religion, etcetera. This article is based purely on the author’s personal opinion and views in the exercise of the Fundamental Rights guaranteed under Article 19(1) (A) and other related laws being enforced in India for the time being.

Section Editor: Pushpit Singh | 25 Oct 2020 17:37pm IST


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