Home Finance Corporate Tax Government 's Biggest Source Of Revenue

Corporate Tax Government ‘s Biggest Source Of Revenue

Corporate   Tax known as Company Tax or Corporation Tax and considered as Income Tax or capital Tax.

There are two types of Tax Direct and Indirect. Direct Tax applied to the corporate. As a country, the tax applied to the:

A corporation incorporated in the country

A corporation which works in the country, it is  imposed  on the income from that country

Foreign Corporation who have established permanently in the country.

Foreign  Companies are one which didn’t register under the Companies Act of India and have control & management located outside India

What Is Here For You

  1. Importance Of Corporate Tax
  2. Comparison Of Corporate Tax
  3. Tax Rate
  4. Corporate Tax Changes
  5. Corporate Tax Direct Or Indirect
  6. Deadline For Corporate Tax Filing
  7. Consequences of Tax Planning
  8. Conclusion
  9. Frequently Asked Question

Income of Company  divides into four types :

Profit  earn by the Company

Capital  gain (Bond, Real Estate, Stock, Assets)    

Income  from Renting A Property

Earning  generated from  Dividend and Interest  

Every company including Foreign Companies file their Income Tax before  30  September, even if the Company is registered in the same Financial Year. 

A Tax Audit is when the IRS decided to examine your tax return if it does not seem to be normal.

Importance Of Corporate Tax

Corporation Tax gives birth to a shareholder if any attempt is made to replace this tax with any of the other then itis does not consider not to be a progressive step.

Corporation Tax is very important for Developing Countries because they did not have a large source of income. The government used it in Public Services.

When a Company earns profit they reinvest it before giving it to the Shareholder as a Dividend.

So they save their Money from getting taxed. After that, a different scenario is created in the Middle Class who saves their money In the bank and is taxed due to which saving stop growing.

The government collects corporate tax as the source of income. The government also takes a loan from the World Bank in the case of a surplus budget.

It is important that the government reduce the Corporate Tax because of many time business Invest in a lower-tax jurisdiction.

A data issued by the government of  India that if the government earns 100 rupees then it earns 21 rupees from the Corporation Tax.

Comparison Of Corporation Tax To Various Countries

 Country  Corporate Tax Rate
 AUSTRALIA30 %
 INDIA  22%
GERMANY   30%
SRI LANKA   28%
 CHINA 25%

Source

Tax Rate

In India Corporate Tax reducing from 30 to 22 for existing companies and from 25 to 15 for Manufacturing Companies including a surcharge and cess, it would be 25.17 from 35

Corporate Tax Changes

It changes with the situation if you can take the example of India earlier it was 30 % but as we know that the World is facing trade war .

It is happening between China and the USA, therefore, a Company that was in China right now is shifting from there to other countries.

tax filing

Capital tax in India was 30% which was highest in Asia so the company was moving from China to a country like Singapore, Thailand, etc.

Seeing this situation India reduces its Corporation Tax and Manufacturing Tax, ease of doing business gets to improve so that company may start establishing its plant in India.

infographic of corporate tax

So that job starts creating and the economy starts improving. India has taken this step by seeing the long vision. In this process, India is going to lose approx. 1.5 lakh crore.

Tax Direct Or Indirect

A tax that is directly paid to the government is called Direct tax. It is directly applied on the individual, organization. An example of direct tax is income tax, corporation tax, wealth tax Many times instead of giving to the dividend company choose the best Investing Options In India to invest it’s earning and enjoy the profit.

The Indirect Tax which we indirectly pay to the government Ex. VAT. It is applicable on the manufacturing of producing goods and services.

Deadline For Corporate Tax Filing

Corporate Tax

The tax day is 15 of April but due to the COVID pandemic, it is pushed to the date 15 July. If you are Self-employed you pay tax in four shifts then you can submit, it taxes on the 15, April,17 June,16 September, and 15 June.

 Corporate Tax Planning

  • Tax planning is the combination of tax and planning we are well aware of the tax that is paid to the government and the government uses it to serve the public.
  • The tax took at the level of the central, state, and local.
  • It is imposed on the previous year earning. It is applicable to the whole country. Then coming planning, it is done in advance but it is pursued in the future.
  • Tax planning is an arrangement of one financial affair in such a way that the burden of tax is reduced, without violating the provision of law.
  • In the constitution, Income Tax has several law which allows saving the tax legally.
  • It is the right of the Taxpayer.

Tax avoidance

  • It is an art of dodging tax authorities without breaking the law.
  • Avoid tax with the weakness and loopholes in the tax laws. Many people use Public Finance to scale their business

Tax evasion

  • It is an illegal method of saving tax where we did not show the actual income. We show the reduced income so that we could get some concession or reduction in the tax.
  • Here we did not disclose the sale and purchase of the property.
  • It manipulates the law. We can also manipulate the facts and figure

Concequences Of Tax Planning

Tax Consumer Office
  • Reduction of Tax liability
  • Minimization of litigation
  • Healthy growth of the Nation
  • Helps in Capital Formation
  • Means the planning thought of   and executed at the end of the income
  • Year to reduce taxable income in a legal way
  • Here planning is made at the beginning of the year and it followed the whole year

Permissive tax planning

Taking benefits of taxation under various provisions. Tax can also be saved with the correct knowledge of GST

Purposive Tax Planning

  • It is based on the purpose. It is made to choose the correct form of investment by choosing the correct form of investment like location or residential investment.
  • Requisites of successful tax planning
  • Deep knowledge of retrospective amendments
  • Knowledge of allied other laws
  • Determination of residential addresses
  • Selection of suitable form of organization
  • Capital structure decisions
  • Diversification of activity
  • Own or lease.

Conclusion

Corporate   Tax known as Company Tax or Corporation Tax and considered as Income Tax or capital Tax. I can also tell you 8 simple ways to save money

There are two types of tax Direct and Indirect.and and applied on the corporate. As a country, tax is applicable on to the:

A corporation incorporated in the country

A corporation that works in the country, tax   imposed  on the income from that country

FAQ(Frequently Asked Question )

1:Corporate Tax Planning Books

Corporate tax planning  CS Kaushal Kumar Agrawal
Corporate tax planning and management assessment year 2019-20 and 2020-21 by H.C Mehrotra and Dr. S.P Goyal  
How  to pay zero taxes,2019, Your Guide to Every Tax Break
1001 Deduction and tax breaks in 2019
Tax made simple by mike piper, CPA
Get what’s yours revised and updated Laurence J Kotlikoff, Philip Moeller, and paul solman
Saving the family cottage: A guide to succession planning for your cottage, cabin, camp, or vacation home
Best for the self-employed: 475 tax deductions for business. 

2:Corporate Tax vs Income Tax

Since both Corporate Tax and Income Tax is direct tax but corporate tax is imposed on the earning of the company while Income Tax is applied to the income of an individual.

3:How Much Corporation Tax Does Amazon Pay

Amazon pays all the taxes that are required to pay in the U.S. and every country where they operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years” a spokesman said.

4:Corporate Tax vs Vat

Capital Tax and VAT are different tax since one is direct and the other is indirect tax VAT is the consumption tax which is imposed on the product that we consume whenever a value is added from the point of production to the point of consumption.

5:Corporation Tax Cuts Are Good

There are many loopholes and weaknesses in the provision of law. So by using those law tax is reduced, one who has enough knowledge of rules and regulations. Then they can use this in their favor. This can also be managed by good planning.

This is Anurag Dwivedi. I have completed my B.A from Allahabad University. Help you at content writing, WordPress site development, FB ads, and SEO

Anurag Dwivedi
This is Anurag Dwivedi. I have completed my B.A from Allahabad University. Help you at content writing, Wordpress site development, FB ads, and SEO
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