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Introduction: Taxes Video Lecture | Famous Books for UPSC Exam (Summary & Tests)

591 videos|1104 docs|444 tests

FAQs on Introduction: Taxes Video Lecture - Famous Books for UPSC Exam (Summary & Tests)

1. What are taxes and why do we have to pay them?
Ans. Taxes are compulsory financial charges imposed by the government on individuals and businesses to fund public expenditures. We have to pay taxes because they are the primary source of revenue for the government, which is necessary to provide essential services such as education, healthcare, infrastructure development, and national defense.
2. What is the difference between income tax and sales tax?
Ans. Income tax is a tax levied on the income earned by individuals and businesses, while sales tax is a tax imposed on the purchase of goods and services. Income tax is based on the amount of money earned, whereas sales tax is a percentage added to the price of goods or services at the time of purchase.
3. How can I deduct my business expenses from my taxable income?
Ans. To deduct business expenses from your taxable income, you need to maintain proper records of all the expenses incurred. These expenses should be directly related to your business activities and necessary for its operation. You can then include these expenses in your tax return as deductions, reducing your taxable income and potentially lowering your tax liability.
4. How does the progressive tax system work?
Ans. The progressive tax system is a method of taxation where tax rates increase as income levels go up. In this system, individuals with higher incomes are required to pay a higher percentage of their income in taxes compared to those with lower incomes. The aim is to achieve a more equitable distribution of the tax burden, with wealthier individuals contributing a larger share.
5. Can I claim tax credits for my charitable donations?
Ans. Yes, in many countries, including the United States, you can claim tax credits for charitable donations. The specific rules and regulations vary by jurisdiction, but generally, you can deduct a portion of your donations from your taxable income, reducing your overall tax liability. However, there are usually limitations and requirements, such as the need for proper documentation and the inclusion of donations to eligible charitable organizations.
591 videos|1104 docs|444 tests

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