The word tax comes from a Latin word “taxo” A tax is a mandatory fee or financial charge levied by a local, state and Centre government from an individual or an organisation to raise revenue to meet all type of government expenditures. Non payment of taxes or resisting to contribute is considered an serious offence and it invites punishment under the pre-defined law.
These taxes come in various forms depending upon the manner they are paid to the taxation authorities. All taxes are classified into two class, direct and indirect taxes.
1. Direct Tax – Direct tax can be derived from its name which implies, this tax is paid directly by the taxpayer to the government. Ex. – income tax & wealth tax.
2. Indirect Tax – Indirect taxes collected little bit different way from direct tax and they are consumption based. These taxes are applied on goods and services whenever they are bought or sold. Ex. – GST, TCS, VAT, Cess etc.
