For example, violation of traffic rules, payment of income tax after the stipulated time etc. The implementation of the Act lies in the hands of these authorities. 1990 ACT CAP. It is a compulsory contribution. If refers to the penalty imposed by competent authority like courts, for the failure of individuals to appear in the courts to complete contracts as stipulated or to safeguard valuable assets. According to Adam Smith uncertainty in taxation encourages corruption. A complex tax system may even prompt an honest taxpayer, to indulge in involuntary tax evasion. Hence, tax policy should aim at bringing about stability in the economy. The celebrated Canon of taxation as prescribed by Adam Smith is explained below; According to this canon, taxes imposed should be in accordance with an individual’s ability to pay. Similarly those taxes, which are taken from surplus income, reduce funds available for private consumption and investment. The development of the principles of taxation is essentially an application of the theory of economic welfare. This doesn’t mean that non-revenue consideration have no place in the formulation of tax policy. The tax system should not distort the working of the market mechanism. Any income tax authority may appoint any income tax authority subordinate to it by the approval of the CBR. This is ‘sumptuary taxation’. The power of taxation is mainly to be used for collecting revenue to the state. Income tax authorities 1. Income Tax Authorities and their Powers The Government of India has constituted a number of authorities to execute the Income Tax Act and to control the Income Tax Department efficiently. Taxation should be used as a means of cutting down total spending, when it becomes necessary so as to prevent excessive total demand and inflation. The fee can be distinguished from price. Hence a license fee is paid in those instances in which the government authority involved; simply confer permission or a privilege to a particular person. It is the duty of the state to guarantee distribution of the estates of deceased persons to heirs specified in wills, or to persons declared to be lawful heirs by courts, if no such heirs exist, the property reverts to the state. Administrative [ Income Tax Authorities ][ Sec. Fees are payments for services rendered by the governments such as registration of births and deaths etc. Likewise customs duties can be levied on imported articles with a view to encourage internal production of the same. income from this source consist of the receipts from lease or sale of these properties or the sale of products in public properties. Adam Smith was probably the first writer to attempt a general statement of the principles or canons which should govern any sound system of taxation. This is an extension of the regulative aspect of taxation. C21 L.F.N. The fee levied must be equal to the cost of production. There are some taxes where primary objective is to control and regulate consumption. They are almost entirely unpredictable. For example, ‘tax holiday’ given to investors who establish investment units in a backward area, for a certain number of years. in a country. Account Disable 11. What are the types of income tax authorities in India ? For example, in India income tax is elastic. It may also resemble a monopoly price, since it is charged by the public authority to prohibit rendering the same service by any other than itself. This personal obligation to contribute to the states support is universal and applies to all. Few taxes materials or services of business character e.g any tax policy the provisions of the state sense. Canon of convenience says that the taxpayer of financing is started, is. Economic welfare characteristic of commercial revenue and income from public property in,... 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