Definition of tax.

A tax is one of the important sources of public revenue. A tax is a compulsory charge or payment levied by the government on an individual or corporation. Therefore an element of compulsion is involved in taxation. Other sources of public revenue are excluded from this compulsory element. There is no direct give and take relationship between a taxpayer and the government.

A tax is a compulsory contribution from the person to the state to defray incurred in the common interest of all without any reference to the special benefits conferred.

A tax is compulsory contribution imposed by the public authority, irrespective of the exact amount of service rendered to the taxpayer, in return for which no specific and are not rendered to the payer. 

The canons of taxation is the fundamental principles of taxation and these are distributed in different modes. The canon of equity which is also called “the ability to pay”.  It means that taxes should be imposed according to the capacity of the tax payer. Poor should be taxed less and rich should be taxed more. This canon involves the principle of justice. All persons contribute according to their ability. As the cost of running government should be equally borne by all, this cannon is justified.

The canon of certainty is the amount of tax to be paid. Every tax payer should know the amount of tax to be paid, when to be paid, and where to be paid and also should be certain about the rate to make investment decisions. Thus all the payers are advised to have an idea on those statement. They have to know their date, amount, thus it leads to an proper tax coverage. 

The canon of convenience is more important one for all those payers in the country. The tax payment should be convenient and less burdensome to the tax payer. Example income tax collected at sources, sales tax collected at the time of sales and land tax collected after harvest. Thus everyone loves to have a convenient in their way of working and that’s a basic aspect of life.

The canon of economy signifies that the cost of collecting the revenue should be kept at the minimum possible level. The tax laws and procedures should be made simple, so as to reduce the expenses in maintaining people’s income tax accounts, that is administrative expenditure to be kept at minimum. 

Thus tax is one of the important aspect of life and becoming a very mandatory one for all the consumer and nowadays taxes are collected from each and every product that we buy. Thus knowing the concept of tax payment gives us lots of ideas and significance of our money.