Few Known And Unknown Taxes That You Pay Everyday


BANGALORE: The amount of money we pay to the Government at predefined rates and periodicity is represented as taxes. For government these taxes are the basic source of revenue through which it provides various kinds of services to the tax payers. Taxes and taxation rules are one of the most complex and confusing topics of any financial system. There are mainly two types of Taxes, direct tax and indirect tax. A direct tax is the personal liability of tax payer. It is collected directly from the tax payers and they have to be paid by the persons on whom it is imposed. On the other hand an indirect tax is paid by consumers when they buy goods and services.

Let’s have a look at some of the direct and indirect taxes that we pay knowingly or unknowingly in our day to day life:

1. Income Tax

Income tax is considered as a key source of funds that the government uses to fund its activities and serve the public. This is one of the most important types of direct tax and almost everyone is familiar with it. It is a tax that governments impose on financial income generated by all entities within their control.

By law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund. In many of the countries, progressive income tax system is employed in which higher income earners pay a higher tax rate compared to their lower earning counterparts.