Q.6. Write answers in ‘one’ or ‘two’ paras each : 3. Explain the principles of taxation.

Balbharati solutions for Economics HSC 12th Standard Maharashtra State Board.

 

Chapter 8 : Public Finance in India

Q.6. Write answers in ‘one’ or ‘two’ paras each :

3. Explain the principles of taxation.

Answer: -

Following are the principles of taxation:

Equity or Equality: Every person will pay the taxes to the government in proportion to his ‘ability to pay’. It means rich people should pay more tax compared to the poor.

Certainty: The taxpayer should know in advance how much tax he has to pay, at what time he has to pay the tax, and in what form the tax is to be paid to the government.

Convenience: Every tax should be levied in such a manner and at such a time that it becomes convenient to the taxpayer.

Economy: The cost of tax collection should be the minimum. If a major portion of the tax proceeds is spent on the tax collection itself, then such a tax cannot be considered as a good tax