Table of Contents
Why do we pay government taxes?
The tax paid by us becomes a receipt (income) for the government of India. They use the receipts to fund essential expenses like defence, police, judiciary, public health, infrastructure etc.
How the government spends our tax money?
The federal taxes you pay are used by the government to invest in technology and education, and to provide goods and services for the benefit of the American people. The three biggest categories of expenditures are: Major health programs, such as Medicare and Medicaid. Social security.
How government taxes affect businesses?
The amount of the tax cost for businesses matters for investment and growth. Where taxes are high, businesses are more inclined to opt out of the formal sector. A study shows that higher tax rates are associated with fewer formal businesses and lower private investment.
What will be the effect of increase in tax by the government?
In general, when the government brings in more in taxes than it spends, it reduces disposable income and slows the growth of the economy. The tax increase lowers demand by lowering disposable income.
Will scrapping retrospective taxes affect cairn-Vodafone tax disputes?
(File photo) NEW DELHI: The government’s proposal to scrap retrospective taxes is said to have a direct bearing on long-running tax disputes with Cairn Energy Plc and Vodafone Group.
What is the retro tax law?
The retro tax law was introduced in 2012 by the then finance minister Pranab Mukherjee to claim tax from international companies which acquired assets of Indian firms. In 2012, the Supreme Court had ruled that gains arising from indirect transfer of Indian assets are not taxable under extant provisions of the Income tax Act, 1961.
What happened to the cairn tax case?
In December last year, a three-member international arbitration tribunal that consisted of one judge appointed by India unanimously overturned the levy of taxes on Cairn retrospectively and ordered refund of shares sold, dividend confiscated and tax refunds withheld to recover such demand.