Taxation Assignment Help

What is Taxation?

Taxation is the duty levied by the government, either State or Central Government up on the general people on their income. This revenue collected by the government is used for the purpose of development of the country and other legislative matters. Taxation is closely linked with economics as both the topics study about the economy. Taxation Assignment Help is one the most asked topics in Courseworktutors Inc.

What are the Types of Taxes?

 Taxation is divided into 2 Parts:

Direct Taxation: When the incidence and Impact of Tax falls on the same person, it is known as Direct Tax. Incidence here means the Initial Burden and Impact means the Final Burden. Some of the types of Direct Taxation are as follows:

  1. Income Tax: In case of Income tax, person has to pay tax on its income at the end of the Financial Year by filing a return. It is a direct tax since the concerned person is the one on whom both incidence as well as impact falls.
  2. Corporate Tax: Corporate Tax is the taxes paid by corporate on their income. There can be a difference in the rate of taxes.
  3. Property Tax: Taxes paid on the property in the name of Municipal duty is known as Property Tax.

Indirect Taxation: When the incidence and Impact of Tax falls on two different person, it is known as Indirect Tax. Some of the types of Indirect Taxation are as follows:

  1. Sales Tax: Tax imposed on the sales of goods are known as Sales Tax.
  2. Excise duty: Tax imposed on the manufacturing of goods are known as Excise duty.

what are the different methods of Charging tax on the Tax Payer?

Depending on the method how the tax is charged on persons or way of calculation, taxes are classed into several categories.

Taxation Assignment help
Taxation Assignment help

Proportional Tax: In this method , tax is calculated on the basis of Income of the tax payer . Higher the Income , higher would be the amount of tax and Vice-Versa.

Example Of Proportional Tax System is as follows

A Inc earned following profit for the last 3 years . The Tax system followed in the Country is proportional method. Proportional Rate of Tax is 12%.

Year 2017($’000) 2016($’000) 2015($’000)
Profit 100 120 160
Tax    12% 14.4% 19.2%

 

Lump Sum Tax: In this Method , tax is charged as a flat amount on all income of the tax payer.

Example Of Proportional Tax System is as follows :

A Inc earned following profit for the last 3 years . The Tax system followed in the Country is Lump Sum Tax. Tax amount is fixed at $12000 irrespective of income of income of the tax payer.

Year 2017($’000) 2016($’000) 2015($’000)
Profit 100 120 160
Tax    12 12 12

 

Progressive Tax: – In this method, higher tax rates are imposed on the tax payer with the increase in the income of taxpayer.

Example of taxation under progressive tax method:

A Inc earned following profit for the last 3 years . The Tax system followed in the Country is Progressive Method.

Progressive tax Chart is as follows :

15%

$0-$6000

 

20%

$6000-$12000

 

25%

$12000-$20000

30%

$20000-$50000

 

35%

$50000+

 

 

Year

 

2017($’000) 2016($’000) 2015($’000)
Profit

 

100 120 160
Tax

 

15% band

 

   6*15% = 0.9    6*15% = 0.9    6*15% = 0.9
20% band

 

       6*20% = 1.2        6*20% = 1.2        6*20% = 1.2
25% band

 

       8*25% =  2.0        8*25% =  2.0        8*25% =  2.0
30% band

 

       30*30%= 9.0        30*30%= 9.0        30*30%= 9.0
35% band

 

      50*35%=  17.5       70*35%=  24.5     110*35%=  38.5
Total Tax

 

30.6 37.6 51.6

Regressive Tax : In this method, tax rates gets decreased with the increase in the income of taxpayer.

Example of taxation under regressive tax method:

A Inc earned following profit for the last 3 years . The Tax system followed in the Country is Progressive Method.

Progressive tax Chart is as follows :

35% $0-$6000

 

30% $6000-$12000

 

25% $12000-$20000

 

20% $20000-$50000

 

15% $50000+

 

 

Year

 

2017($’000) 2016($’000) 2015($’000)
Profit

 

100 120 160
Tax

 

15% band

 

   6*35% = 2.1    6*35% = 2.1   6*35% = 2.1
20% band

 

       6*30% = 1.8        6*30% = 1.8        6*30% = 1.8
25% band

 

       8*25% =  2.0        8*25% =  2.0        8*25% =  2.0
30% band

 

       30*20%= 6.0        30*20%= 6.0        30*20%= 6.0
35% band

 

      50*15%=  7.5       70*15%=  10.5     110*15%=  16.5
Total Tax

 

19.4 22.4 28.4

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