What is Tax? Video Lecture | Famous Books for UPSC Exam (Summary & Tests)

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FAQs on What is Tax? Video Lecture - Famous Books for UPSC Exam (Summary & Tests)

1. What is tax?
Ans. Tax refers to a mandatory financial charge imposed by the government on individuals and businesses to fund public expenditures and services. It is levied on income, profits, property, sales, and various other transactions.
2. How is income tax calculated?
Ans. Income tax is calculated by applying a specific tax rate to an individual's taxable income. Taxable income is determined by subtracting allowable deductions and exemptions from the total income earned during a specific period. The tax rate varies based on income brackets, with higher incomes generally subjected to higher tax rates.
3. What are the different types of taxes?
Ans. There are various types of taxes, including income tax, sales tax, property tax, corporate tax, and value-added tax (VAT). Income tax is imposed on individuals' earnings, while sales tax is levied on the purchase of goods and services. Property tax is based on the value of real estate, and corporate tax is applicable to the profits of businesses. VAT is a consumption tax imposed at each stage of production and distribution.
4. What are tax deductions and exemptions?
Ans. Tax deductions and exemptions are provisions that allow individuals and businesses to reduce their taxable income, thereby lowering the amount of tax they owe. Deductions are specific expenses or costs that can be subtracted from the total income, such as mortgage interest or medical expenses. Exemptions, on the other hand, provide a certain amount of income that is not subject to tax, often for dependents or certain categories of income.
5. How does the tax system support public services?
Ans. The tax system supports public services by generating revenue for the government. The funds collected from taxes are allocated towards various public expenditures, such as infrastructure development, healthcare, education, defense, social welfare programs, and maintenance of law and order. These services benefit the entire society and contribute to the overall well-being and development of the country.
591 videos|1104 docs|444 tests

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