Main Sources of Government Incomes !!! Exclusive by Ride on Finance

Main Sources of Government Incomes !!! Exclusive by Ride on Finance

We always think about our revenue sources. Do you ever think How our government make its revenue? What are the main sources of government Income and from where government get money for making huge expenses in defence, infrastructure etc. These are some question that make me curious to know about in my childhood. In this article we are giving the answer to the same questions.

1. Tax Income

Tax income is the major source of income. Government charges taxes on various items. Mainly we can divide Taxation in the form of Direct Tax and Indirect Tax. Government uses the taxation income for managing its expenditure. Just like we make the budget in our home government also make budget for the whole nation.

a) Direct Tax

Direct tax is a tax which is laid on the income of the person who pays the tax. Direct tax mainly include Income Tax. Collection from Direct Tax is approximately 49.66 percent of total taxable income.

b) Indirect Tax

Indirect tax is a tax which is levied on goods and services rather than on income or profit. Indirect tax covers many taxes like  GST, Customs, Gift Tax, Wealth Tax, Capital Gain Tax and Entertainment Tax. 

GST

GST  means Goods and Service Tax. This is a kind of indirect tax which is levied in India on goods and services

Customs

Custom duty is a kind of indirect tax which is charged by government on export and import.

Gift Tax

Gift Tax is basically charged on the gifts received by a person in India.

Wealth Tax

As the name says wealth tax is charged on the wealth of a person.

Capital Gain Tax

Capital Gain Tax is charged on Capital gain received by assesee on selling its Asset

Entertainment Tax

Entertainment Tax is charged by government on various kind of entertainment like movies, games etc.

2. Non Tax Income

• Railway

Our Indian railway is world's 4th Larget Railway network. Indian railway is operated by the Ministry of Railways. Government generates decent amount of revenue from running the services of railway.

• Dividend and Profit from PSU

Indian government owns so many public sector companies and private companies from which government received dividend on yearly basis. Dividend plays key role in government total revenue.

• Interest Receipts

Government gives loans to many states, Corporates and public institutions and it collects interest on the loans. These interest contributes a major portion in the revenue of government

• Currency manufacturing and running

Government has the authority to manufactures and circulate the currency. The difference between cost of currency made in supplying to the public and the value of currency make the profit part for government. This is also a source of income for government.

• Tourist Spot fees

Tourists came from inside and outside the country to visit many tourist destinations. These destinations have some visit fees that is charged by government to maintain these spots and these also be the source of Indian government revenue.

• Other Non tax Revenue

Instead of these above points government do so many things like events, charges penalty and many other things that be the source of revenue of government.

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