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What Is Taxation?

A tax that governments impose on financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund. Income tax is a key source of funds that the government uses to fund its activities and serve the public.

Basically, tax can be classified into two broad categories :

1. Direct Tax

2. Indirect Tax

1. Direct Tax :

A direct tax is a tax paid by a person on whom it is legally imposed. In direct tax, the person paying and bearing tax is the same. It is the tax on income and property. Examples of direct taxes are:

Advantages Of Direct Tax :

Disadvantages Of Direct Tax :

2. Indirect Tax :

An indirect tax is a tax imposed on one person but partly or wholly paid by another. In indirect tax, the person paying and bearing tax is different. It is the tax on consumption or expenditures. Examples of indirect taxes are:

Advantages Of Indirect Tax :

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