How taxes are calculated

How taxes are calculated

The fact that humans live in a civilized and systematic environment, it has given way for new rules and protocols to be introduced for the overall betterment of human life. Humans are known to have the higher most strata of thinking, hence we are considered to be on the top among living beings. The process of planning for one’s future and unforeseen instances in life makes us as humans a step above others. In every step of being and existence, humans have preferred to plan ahead of any happening one expects or does not expect in one’s life.

Although one might prefer to live and breathe in an undivided world, the fact that the land we walk over is segregated in countries, states, cities, and towns. Retirement or better planning of a citizen’s life is an important part as an inhabitant of the state. It is the long-term responsibility of the state government to ensure that it’s citizen’s life is well planned especially after they retire as he or she is an active employee of the state.

One such social responsibility that is taken over by the state is the use of public money collected through taxes for the betterment of common life and each day as it is served.

There are several ways in which a government body can work towards collecting taxes from the public. This procedure is also dependent on the kind of employment one is into. The procedure majorly depends if a person is self-employed or employed by a third-party firm. The percentile that is mandatory for an individual is decided on the earning bracket he or she falls. As is dictated by a common rule throughout the world, the more a person earns, the more is the percentage of tax expected from them.

There used to be a time when a citizen would be singularly responsible for paying taxes at the end of a tenure; however, taking into account that modern life has made any and all members of the society busy with the mundane work life presents them, tax collecting has been made easier and the procedure more accessible.

For salaried individuals, collection is taken care of by the respective companies’ pay roll department, wherein the calculation of percentile is taken care of by the in-house income tax department.