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What is Tax?

It is a charge imposed by the government on an individual income or assets called Tax. Direct Tax and Indirect Tax. Examples for direct tax income tax, corporation tax, etc. some examples for indirect tax sales tax service tax, etc.

Why should we pay tax to the government?

We all should pay taxes to the government because it is the second biggest source of income for the government. The tax amount will be used for defense upgrading, generating employment for the people, and the welfare of society. By paying the tax to the government the corruption will reduce and our country becomes a corruption-free nation. If we do not pay taxes the government can't run the country.

There are two types of corporations

Domestic Corporation

Foreign Corporation

Domestic Corporation: The company is registered in India under India's company Act,2013. Also, a foreign company is called a domestic corporation.

Foreign Corporation: The company which is not registered in India under India's Company Act 2013 but the company exists in India but the control of management is located outside of India.

Calculation of Net income for Corporate

Corporate income tax is also called company tax. Company tax is imposed on the profit of a company. The tax is calculated after deducting all expenses like salary, rent, depreciation, etc.

The formula to find Net revenue is

Net Revenue=Gross Revenue-expenses

Advantages of corporative Tax

Tax is the biggest income source for the government because the tax collected from the company is used for the development of the nation and the people who leaves there.

Paying corporation tax amount is divided into various parts like education, health, generating employment, etc.

If the company pays regularly the government can support it when the company is in trouble or when the company faces a loss.

Also, Corporate income tax will increase the GDP of the country.

What will happen if the company will not pay corporative tax

Paying corporation tax is mandatory for all companies. If the company is not paying its corporate tax a penalty will be imposed. If the company does not pay the penalty amount interest will apply to that amount. When the company is not ready to pay any amount to the government, the government can take any action against that company.