Taxing is a financial charge paid to the government of a country for its support and development. Whether it is an individual or a business; he has to pay tax as government norms and rules. Taxation also covers tolls, excise and customs, subsidy and more like that.
A person who is liable to pay tax and yet does not pays it, is subject to legal action. Government has set different slabs and rules for different types of tax payers which generally are sectioned according to your income.
Some Important Types Of Taxes Pay Under The Tax Act
This tax is imposed on a business if it owns its own property or estate. Property tax is to be paid in its local office or the state’s office of the area where business real property is situated.
Excise tax is considered as an indirect tax which a business has to pay. If we talk in-depth about the excise tax, it is a tax paid on the materials used or consumed for the final product. It can include raw materials like diesel, coal etc.
Business Income Tax
All businesses, small or big are liable to pay business income tax. It is calculated by the gross revenue generated minus the deductible exemptions created the taxable amount for a business income tax.
This tax is generally paid by the merchants to the department of revenue for a particular state. It is levied when the finished goods are sold to its final consumers and customers.
These taxes are paid by the sole proprietor or partners for a security reason, it may be a medicare or something else.
Payroll tax also called as employment tax is paid by owner of all types of business for its employee’s total salary or income. This tax is paid for the tax paying employee’s social security, medicare, or employee benefits.
Value Added Tax( VAT)
The value added tax also known as a goods and service tax applies to any sales transaction of a company or business. If you buy any raw material then this is levied on every purchase and sales transaction. This goes from one business to another business and the chain continues. This tax is to be charges to the customer or purchaser of goods.
Professional tax has to be compulsorily paid by every individual or a business according to their incomes. This is a tax which is paid for one’s profession, employment, trade or calling. The professional tax paying is divided into different slabs depending on the monthly salaries or profits.
Central Sales Tax(CST)
This tax is levied on traders and merchants if the transaction is done outside the boundaries of a state. It is paid by the transactions of interstate deal in a financial year.
It is really very important to know the types of taxes a business has to pay. If you miss on even a single tax payment then possibly your business has to go through a penalty. It is better to appoint a Chartered accountant firm to check the taxes and their calculations in order to run a successful business.