Taxation and Revenue Law: Direct and Indirect Tax, IT Act, Residency, Capital Gain, and Loss

Taxation and Revenue
Law

Contents
TASK 1............................................................................................................................................3
Question 1....................................................................................................................................3
Question 2....................................................................................................................................4
Question 3....................................................................................................................................4
Question 4....................................................................................................................................5
Question 5....................................................................................................................................5
Question 6....................................................................................................................................5
Question 7....................................................................................................................................6
Question 8....................................................................................................................................6
Question 9....................................................................................................................................7
Question 10..................................................................................................................................7
TASK 2............................................................................................................................................7
QUESTION 1..............................................................................................................................7
Question 2....................................................................................................................................9
Question 3....................................................................................................................................9
Question 4....................................................................................................................................9
Question 5....................................................................................................................................9
Question 6..................................................................................................................................10
Question 7..................................................................................................................................10
Question 8..................................................................................................................................10
Question 9..................................................................................................................................11
Question 10................................................................................................................................11
REFERENCES..............................................................................................................................13

TASK 1
Question 1
Direct and Indirect Tax-
There are mainly two categories of tax as the direct tax and the indirect tax. The direct tax
is the tax that is levied directly on the income and gains of an individual or the firm. The direct
tax is calculated on the basis if the income that is earned by an individual. Moreover, the direct
tax is paid directly to the government by the individual or an organisation upon which the tax is
so levied. The indirect tax as the name confers in indirectly paid by the individuals to the
government of the country. The indirect tax is paid on the services and the goods that are being
purchased by the individuals from the retail shop in the market. The indirect tax is indirectly paid
by the customer. Moreover, the tax is levied firstly on the manufacturer of the product. Then, the
tax is charged from the wholesaler who has purchased the products from the manufacturer to sell.
Then it is charged from the retailer and finally it is charged by the customer of the product. This
is the process of paying the indirect tax as intermediaries are involved in this (Allen, 2020).
The burden of paying the tax in case of direct tax cannot be shifted from that individual.
On the contrary to this, the burden of paying the tax always shifted to another individual in case
of indirect tax as so many intermediaries are involved in this process. The direct tax is paid
straight by the individual. But, the indirect tax is paid by the intermediaries. The direct tax is paid
when the income so earned reaches in the hands of the concerned individual. On the other hand,
the indirect tax is paid when the goods and the services reached to the adequate individual. The
collection of tax in case of direct tax is much difficult as compare to the indirect tax. The
examples of the direct tax are the income tax, wealth tax, etc. The illustration for the indirect tax
are the GST tax, Sales Tax, etc.
The progressive tax can be explained as the tax rate which is higher for the high earning
individuals in the society. Moreover, the regressive tax imposes the equal level of tax rate on all
the individuals irrespective of the earning capacity of the individual. The sales tax is the
example of the regressive tax (Martin, 2018). The main aim of the progressive tax is to ensure
that the tax rate is fair to all the tax payers of the country. This would empower the country in
order to develop the weaker and the backward section of the society. Moreover, in Australia, the