What are the principles of taxation in India?

The basic object of taxation should be to ensure equality or fairness. This is of two types — horizontal and vertical. The former refers to the rule of taxation whereby equal income is taxed equally — no matter how it is earned.

What do you mean by principles of taxation?

The principle recognises that the purpose of taxation is to pay for government services. If taxes are imposed according to the benefit principle, people pay taxes in proportion to the benefits they receive from government spending.

What are the two taxation principles?

key takeaways. Double taxation refers to income tax being paid twice on the same source of income. Double taxation occurs when income is taxed at both the corporate level and personal level, as in the case of stock dividends. Double taxation also refers to the same income being taxed by two different countries.

What is benefit principle of taxation?

The benefit principle is a concept in the theory of taxation from public finance. It bases taxes to pay for public-goods expenditures on a politically-revealed willingness to pay for benefits received. It has also been applied to such subjects as tax progressivity, corporation taxes, and taxes on property or wealth.

What are the principles of a good tax system?

A good tax system should meet five basic conditions: fairness, adequacy, simplicity, transparency, and administrative ease.

What are principles of good taxation?

A good tax system should meet five basic conditions: fairness, adequacy, simplicity, transparency, and administrative ease. Although opinions about what makes a good tax system will vary, there is general consensus that these five basic conditions should be maximized to the greatest extent possible.

What are the modern principles of taxation?

The modern principles of taxation are: The rational combination of direct and indirect taxes, which implies the utilization of various types of taxes, taking into consideration both the wealth and the income of the taxpayer.

Who supported the modern view on benefit theory of taxation?

In modern public-finance literature, there have been two main issues: who can pay and who can benefit (Benefit principle). Influential theories have been the ability theory presented by Arthur Cecil Pigou and the benefit theory developed by Erik Lindahl.

Who gave benefit principle of taxation?

In its use for assessing the efficiency of taxes and appraising fiscal policy, the benefit approach was initially developed by Knut Wicksell (1896) and Erik Lindahl (1919), two economists of the Stockholm School. Wicksell’s near-unanimity formulation of the principle was premised on a just income distribution.

What are the six principles of taxation?

The six proposed principles are: efficient and effective administration and communication; certain, neutral, understandable legislation; equity influencing different levels of society; taxpayers’ duty to contribute to society versus the government’s duty to strike a balance between taking too little and taking too much …

What are the three basic principles of a sound tax system?

The principles of a sound tax system are fiscal adequacy, administrative feasibility, and theoretical justice. Fiscal adequacy means the sources of revenue must be sufficient to meet government expenditures and other public needs.