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Taxation Theory Basics (in Hindi)
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This lesson explains the definition of a tax and Cannons of taxes.

Tanya Bhatia is teaching live on Unacademy Plus

Tanya Bhatia
Topper in 12th Cbse, JRF holder, Assistant Professor in Satyawati DU Expert in NET for Economics.Teaching is work of heart❤❤❤

Unacademy user
sir aap plz YouTube PR bhi upload kr dijiya kare
mam how can I get ur all completed course
Tanya Bhatia
2 months ago
Contact me at
could u please mam tell me...the distribution of the burden of tax is known as incidence or shifting of tax
Tanya Bhatia
a year ago
It is incidence of tax
Sonakshi Saxena
a year ago
thank you mam...but please make it clear..icidence of tax can not be shifted it is the final money burden of tax so how can it be distributed
thnk u mam economic/environment ke kuch MCQ karwadijiye .....
Tanya Bhatia
a year ago
next special class m register kr lanar wed ko it will be on International Trade
Usha Mukhi
a year ago
ok mam thnk u
Mam plz make growth and development industry and Indian economy... topic wise mam

  2. WHAT IS A TAX? A tax is a Compulsory levy and those who are taxed have to pay the sums irrespective of any Corresponding return of services or goods by the Government.

  3. PRINCIPLES OF TAXES *The four canons of taxation has given by Adam Smith. 1.Canon of Equity 2.Canon of Certainty 3.Canon of Convenience 4.Canon of Economy

  4. BENEFIT-RECEIVED THEORY .It was initially developed by KNUT WICKSELL and Later Prof. LINDHAL. According to this theory the burden of taxation should be divided among the people in proportion to the benefits received from the state.

  5. ABILITY TO PAY APPROACH .This was given by Seligman and Contribution by Pigou, Edgeworth and Kaldor. .According to this approach, a citizen is to pay taxes because he can and his relative share in the total tax burden is determined by his relative paying Capacity.

  6. SACRIFICE PRINCIPLE This was given by Richard Musgrave *Three Sacrifice Principles- 1.Equal Absolute Sacrifice 2.Equal Proportional Sacrifice 3.Equal Marginal Sacrifice

  7. EQUAL ABSOLUTE SACRIFICE This means that different tax payers are made to sacrifice the same amount of utility by way of taxes. Less Progressive .U(Y)-U(Y-T)

  8. EQUAL PROPORTIONAL SACRIFICE In this case each tax-payer is supposed to sacrifice the same percentage of the total satisfaction which he would derived from his income. More Progressive than Absolute Equal Sacrifice. U(Y)b

  9. EQUAL MARGINAL SACRIFICE OR THE LEAST AGGREGATE SACRIFICE According to this theory the tax burden should be imposed in such a way that the marginal utility of income left after tax with any tax payer would be same. Highly Progressive.

  10. INCIDENCE OF TAXES Who ultimate bears the burden of tax. Whereas Impact of a tax is its first point of contact with the tax payers. It is upon those who bear the first responsibility of paying it. Incidence of Tax, on the other hand is defined as its final resting place.

  11. BURDEN ON PRODUCERS Supply is Perfectly Inelastic- Full Burden on Producers Supply is less Elastic- more Burden on producers

  12. VERTICAL EQUITY Vertical equity is based on the idea that those who earrn more money, or have more economic resources, should be taxed at higher rates than those earning less money. The idea is that those who have the means to pay more taxes should contribute at higher rates than those who do not. For example, if someone who earns 50,000 is subject to a 10% tax rate and someone who earns 100,000 is subject to a 20% tax rate, then the system is considered vertically equitable.

  13. .Q3-The ability to pay principle of taxation is logically most consistent with the Normative Notion of- 1. Taxation Neutrality 2. Horizontal Equity 3. Value-added taxatiorn 4. Vertical Equity

  14. .Q4- The greater the elasticity of supply the greater is- 1. Incidence of tax on buyers 2. Incidence of tax on sellers 3. Impact of tax on sellers 4.Impact of tax on buyers