Canons of Taxation

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      Tax is a compulsory payment made by a person or firm to a government, without reference to any benefit the payer may derive from the government. It is entirely different from fee and fine.But these taxation should not violate any provision of Indian constitution especially Fundamental Rights.

       
  The objective of taxation is not only to regulate the revenue but also for Economic development, price stability, Reduction in inequality, etc.
   

        There were approximately 9 canons in taxation out of which 4 canons by Adam Smith, an 18th century philosopher also known as "Father of Modern Economics"  are very important in proper taxation.


1. CANON OF EQUALITY:[சமத்துவ கட்டளை, एकता का नियम]
   
                      Canon of equality states that the burden of taxation must be distributed equally or equitably among the taxpayers.

                 People of equal ability should pay equal amount of taxes .

                   This canon states that person having greater ability must pay large taxes to maintain equality .

2. CANON OF CERTAINTY : [உறுதித்தன்மை கட்டளை, यक़ींन का नियम]

                       This Canon denotes that the time of payment, manner of payment, the quantity to be paid i,e., tax liability must be certain.

       This certainty is applicable for both the taxpayers and the tax levying authorities.

3. CANON OF CONVENIENCE :[வசதிக் கட்டளை, सुविधा का नियम]

                       This canon states that taxes should be levied and collected in a manner with greatest convinence for the taxpayer as well as Government.

          It should be painless and also trouble free as far as possible and practicable.

         For instance employees were taxed at the time of receiving salaries.

             It can also be called as "Canon of Ease".

4.CANON OF ECONOMY :[சிக்கனக் கட்டளை, (पता है तो comments मे लिक्ना)]         
                     This principle brings out that the cost of collecting tax must be minimum so that the major part of collection may bring to the government treasury.

             So the cost of tax collection should be less than the amount of tax collected.If large part of tax revenue is spent in collecting it, then it would be called as inefficient tax system.




            There are several systems and benefits for the people behind the taxation. WE THE CITIZENS OF INDIA, should pay our taxes properly and contribute to make corruption free India.