Hey there,<\/p>\n
As you know Economy as a subject has always been a traditional bottleneck for Civil Services aspirants. This is because most of us did not study it during our school days.<\/p>\n
So in this\u00a0series of articles<\/em>, we will be taking up the numerous economic jargon, one by one and try to simplify them for you.<\/p>\n We aim to do the above by explaining various economic terms in a simple and a lucid manner. This will be especially beneficial for the students who are going to give their first attempt.<\/p>\n In this article<\/em> we will learn comprehensively about Indian Budget, <\/strong>Fiscal policy and Taxation in India<\/strong>.<\/p>\n Table of Contents<\/span><\/strong><\/p>\n <\/p>\n First let us understand what we mean by Tax?<\/span><\/p>\n In simple terms, tax is the money paid by the taxpayers to the government. Tax is compulsory payment and not voluntary payment or donation made by the taxpayers. It is compulsory as it is extracted by the government through legislation. If taxpayers fails to pay the taxes or evade taxes, it is punishable by law<\/span><\/p>\n Government performs various functions – such as maintenance of law and order\/ defence, undertakes welfare and developmental activities, provides public goods and services. Now the government needs money to perform these functions and it gets it through Taxation.<\/span><\/p>\n Eg- Central Government provides income support to farmers (PM-KISAN), scholarships to the vulnerable sections etc. These are funded by the Taxpayers money\u00a0\u00a0<\/span><\/p>\n A tax can be<\/span><\/p>\n A tax that takes a larger percentage of income from high-income groups than from low-income groups.<\/span><\/p>\n For example – Income Tax rate India. (tax rate goes up as income level rises). Rich people pay a larger portion of their income as tax in comparison to poor people<\/span><\/p>\n A tax that takes the same percentage of income from all income groups<\/span><\/p>\n For example – if the Government decides to have a single slab in Income tax rate (let us assume 30%). Then the percentage of income paid in taxes will be same for the low income group, middle income group and high income group.<\/span><\/p>\n A tax that takes a larger percentage of income from low-income groups than from high-income groups.\u00a0<\/span><\/p>\n For example – An indirect tax on Hair Oil (let us suppose – 18%). Lower income group pay high proportion of their income as tax while buying it than higher income group<\/span><\/p>\n India has a well developed taxation structure.\u00a0<\/span><\/p>\n The tax system in India is mainly a<\/span> three tier system<\/span> which is based between the Central, State Governments and the local government organizations (such as Municipality and Panchayats).<\/span><\/p>\n Thus, Taxes in India are <\/span>levied<\/b> by\u00a0<\/span><\/p>\n Art 265<\/strong> states that no tax shall be levied or collected except by the authority of law.\u00a0<\/span><\/p>\n It means that whatever tax is being charged has to be backed by the law passed by parliament or state legislatures. In other words, no tax can be levied if it is not backed by legislation passed by either Parliament or state legislatures. Any tax levied by the government which is not backed by law or is beyond the powers of the legislating authority may be struck down as unconstitutional.\u00a0\u00a0<\/span><\/p>\n Article 246 (SEVENTH SCHEDULE) of the Indian Constitution, distributes legislative powers including taxation, between the Parliament and the State Legislature.\u00a0<\/span><\/p>\n Schedule VII provides for the three lists:<\/span><\/p>\n Separate heads of taxation\u00a0 are provided under List- I & List – II of Seventh Schedule of the Constitution. However, there is no head of taxation in the Concurrent List (It means that Union and the States have no concurrent power of taxation)<\/span><\/p>\n Article 246(1) – Parliament has exclusive powers to make laws with respect to any of matters enumerated in List I in Seventh Schedule<\/span><\/p>\n Article 246(3) provides that State Government has exclusive powers to make laws for State with respect to any matter enumerated in List II of Seventh Schedule to Constitution(i.e. State List).<\/span><\/p>\n Art 248 mentions that the residual powers of Legislation are vested in the parliament. It means that Parliament has exclusive power to make any law with respect to any matter not enumerated in list II and III.\u00a0 Such power shall include the power of making any law imposing a tax not mentioned in either of those lists.<\/span><\/p>\n Some of the important ones are:<\/span><\/p>\nIndian Budget<\/strong><\/h5>\n
Introduction and Concept of Budget<\/a><\/h3>\n
Principles and Objectives of budget<\/a><\/h3>\n
What are the various types of Budgets?<\/h3>\n
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What are the components of budgets?<\/a><\/h3>\n
Budget in India<\/a><\/h3>\n
What is the process of budget?<\/a><\/h3>\n
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Three types of constitutional funds<\/h3>\n
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Legislative control over budget<\/a><\/h3>\n
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Recent developments in Indian budget<\/h3>\n
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1.Tax<\/b><\/h3>\n
Types of Taxes according to fairness<\/b><\/h5>\n
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Progressive Tax<\/b><\/h5>\n
\u00a0<\/span>Proportional Tax<\/b><\/h5>\n
Regressive Tax<\/b><\/h5>\n
2.Taxation in India<\/b><\/h3>\n
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3.Constitutional Provisions Pertaining to taxation in India<\/b><\/h3>\n
Distribution of Taxation Power\u00a0<\/b><\/h5>\n
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Taxes within Union jurisdiction as specified in List I in the Seventh Schedule of the Indian Constitution<\/b><\/h5>\n
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