Public revenue : direct and indirect taxes - class-XI

Direct taxes are those which are those which are paid directly to the government by the taxpayer.These taxes are not paid deducted and paid on behalf of the taxpayer.Key examples of direct taxes are Income tax, Wealth tax and Corporation tax.

A direct tax is paid by a person upon whom it is legally imposed; its effect is borne by the tax payer, for example, income tax. Income tax is paid by an individual, a Hindu undivided family, a company, a firm, and local bodies etc. on their incomes. The effect of this tax is borne by these tax payers themselves, the tax payer cannot shift the incidence of the tax upon somebody else. In other words a direct tax is demanded from the very person who it is intended or devised for.

A direct tax is paid by an individual or organization to the entity that levied the tax. 

According to the income tax rule, 1961 depreciation is to be charged on the basis of written down value method in India which meant depreciation percentage charge would be applied on the written down value that came after all such depreciation from previous years. 

Estate duty was levied on the total property passing to the heirs on the death of a person.

Custom duties are levied on export and import of goods and excise duty levied on production of goods.

Marginal rate of income tax means highest slab of income tax, i.e., $30$% for individuals having income above $Rs. 10,00,000$.

Net National Product (NNP) at market price includes indirect taxes. National Income (NI) is equivalent to NNP at factor cost. To get from NNP at market price to NNP at factor cost, one must subtract net indirect taxes.

Direct taxes do need maintenance of accounts. For example for filing Income Tax returns, there needs to be proper maintenance of accounts so that the figures mentioned is proper and the tax calculated is error free.

The correct statement is that custom duties have been drastically cut down since 1991.
Others are wrong because excise duty is levied on production, VAT has
been adopted by some states in India and agriculture contributes nil to the direct tax revenues in India.

$GNP _{mp} - NFIA = GDP _{mp}$.

When the burden of the tax falls on the person on whom the tax is imposed, it is called Direct Tax. The effect of this tax is borne by these tax payers themselves, the tax payer cannot shift the incidence of the tax upon somebody else. In other words a direct tax is demanded from the very person who it is intended or devised for.

The history of Income-Tax in modern India dates back to 1860 when the first Income Tax Act was introduced by James Wilson who became (British) India's first finance member. 

Under the relevant tax provisions, the Board may reduce the minimum distribution requirement by up to 20 percent of the statutory percentage.

Non Tax Revenue Receipts are those revenue receipts which are not generated by Taxing the public. 

The firm is paying tax according to the VAT system. VAT stands for Value Added Tax, which is a type of tax that is assessed incrementally, based on the increase in value of a product or service at each stage of production or distribution. 

Public revenue includes all the following:

• Tax revenue: revenue earned by the government by taxing people is called tax-revenue. It is of two types:

1. Direct tax: tax paid to the government directly. Examples include income tax, gift tax, wealth tax, property tax, etc.
   
2. Indirect tax: this tax is collected by an intermediary person from the person who ultimately bears the burden. Examples are sales tax, value-added tax (VAT), goods and services tax (GST), etc.

• Non-tax Revenue: Non Tax Revenue Receipts are those revenue receipts which are not generated by taxing the public. Examples of non-tax revenue includes revenue from power distribution, irrigation, banking services, insurance, and community services, etc. which make the part of Government business.
  

• Capital receipts: this is the income flow from one of the following sources. Cash from the sale of fixed assets, Cash from the sale of shares in the business, Cash from the issuance of a debt instrument which includes loans and bonds.
  

Non Tax Revenue receipts are those revenue receipts which are not generated by taxing the public. Example of a non-tax revenue includes revenue from power distribution, irrigation, banking services, insurance, and community services etc. which make the part of the Government business.

Non Tax Revenue Receipts are those revenue receipts that are not generated by taxing the public. Example of non-tax revenue includes revenue from power distribution, irrigation, banking services, insurance, and community services, etc. which make them part of the Government business. Other examples include loans or other borrowings from monetary funds or other governments that are included under, aid from abroad, revenue from state-owned enterprises, etc.

Capital receipts: This is the income flow from the sale of fixed assets, cash from the sale of shares in the business, cash from the issuance of a debt instrument which includes loans and bonds. The sale of goods and services is not a capital receipt.

Public revenue which is a major contributor to the total central revenue is tax revenue. Revenue earned by government by taxing people is called tax-revenue. It is of two types:

• Direct tax: tax payed to the government directly. Examples include income tax, gift tax, wealth tax, property tax etc.
  
• Indirect tax: this tax is collected by an intermediary person from the person who ultimately bears the burden. Examples are sales tax, value added tax (VAT), goods and services tax (GST) etc. 
  

A status in which government’s expenditure exceeds more
than its revenue is called budget deficit. The term budget deficit is most
commonly used to refer to government spending rather than business or
individual spending, but can be applied to all of these entities. 

Personal income tax- it is based on the principle of ability to pay. The tax levied by the union government on income of individuals is known as income tax.

Revenue deficit=revenue expenditure & revenue receipts

The individual income tax has been the largest single source of federal revenue since 1950, amounting to 46 percent of the total and 8 percent of gross domestic product (GDP) in 2014.

Money held by the public is a measure of money supply in an economy. It excludes money held by the central bank (RBI), commercial banks, and the government, as these are considered money creators or issuers rather than the public.

The Union Cabinet approved the signing and ratification of a tax information exchange agreement with Samoa in 2011 to facilitate the exchange of information for tax purposes.

The Parthasarathi Shome committee was appointed by the Indian government to provide recommendations on the implementation of the General Anti-Avoidance Rule (GAAR).

A tax is defined as a compulsory financial charge or levy imposed by a government on an individual or entity to fund public expenditures, without a direct quid pro quo or specific benefit provided to the payer.

Both the Chelliah Committee (1991) and the Boothalingam Committee (1968) were significant in recommending reforms for the simplification and rationalization of the Indian tax system.

Following the 1991 banking sector reforms, the definition of priority sector lending was expanded to include various sectors like agro-processing, venture capital, and software to boost economic growth.

Public revenue is all the revenue receipts of the government. These revenue receipts consists of taxes, interest on loans etc. Majority of the revenue collected by the government is in the forms of taxes i.e. both direct taxes (income tax, wealth tax, property tax) and indirect taxes (GST, service tax). These taxes give revenue in huge quantity and hence it becomes the most important source of public revenue.

Public revenue refers to the total income received by the government from all sources, including taxes, fees, and other non-tax revenues.

$GDP _{fc} = GDP _{mp} - Indirect\ taxes + Subsidies$.
This is because market prices is reached by adding indirect taxes to the cost of production, i.e., factors of production, and deduction of subsidies provided, if any.

$NNP _{mp} - Net Indirect Taxes = NNP _{fc}$.
This is because the market price is the cost of production, i.e, factor cost, plus the taxes payable on the product.

Agricultural Holding Tax was a recommendation of the Raj Committee. The central government appointed the committee on taxation on agricultural wealth and income under the chairmanship of Dr. K.N. Raj in February 1972 to examine the question of taxation of agricultural wealth and income from all aspects. The Raj committee submitted its report in October 1972.

Custom Duty is a indirect tax for goods when import or export. The tax is collected by Central Board of Indirect Taxes and Customs.

An indirect tax is a tax which is imposed on one person and is paid partly or wholly by another party. This means that the effect or incidence of an indirect tax is not upon the party who pays the tax but on someone else. examples of indirect taxes are value added tax, excise duty, service tax. An excise duty is a type of indirect tax that is levied on the sales of particular goods. This tax is not paid directly by the customer but is passed on to the consumer by a merchant or producer of goods as a part of the price of the product.

A fund raised through the various taxes is referred to as tax revenue. The sources of public revenue consists of both Tax and Non-tax revenue.

The share of indirect taxes was 60% in the fiscal year 2009-10