Business and taxation matters go hand in hand with each other. Every small, large or medium size business is facing taxation matters because it is imposed on every business by government. In every state the collection of tax is the must do activity performed by tax collectors or government representatives. Most importantly, the tax collectors are found in revenue department and it is absolutely a complete field where the involvement of government is more prominent thing. Those who look for new business should be aware of all the tax implications and matters. No one is free from paying tax and especially entrepreneurs fall in this category. The relation of business & taxation is very old and strong. In short one can’t be separated from other without any reason. The type of business is also an important factor when taxation is concerned. Every business has its own working style and imposition of tax vary from one business to another.
There are many types of businesses widely being operated by entrepreneurs at professional level. Apart from business types, entrepreneurs are also of different types. Let’s talk about the business categories and the implementation of tax over to that business. Sole proprietorship business is the first category when business listing is viewed, it is a simple business operated by a single man where only a single person is the owner, employee, manager and worker. The imposition of tax is also simple that is applied over a sole owner. He is a registered filer, when tax payment is to be done so he pays tax according to the income he earns in business. Income tax return is offered by government tax & revenue department to all the businessmen who are filer and earning handsome money. Besides sole proprietorship business, partnership is also included in the list where implication of tax is compulsory. In partnership business, normally two or more than two persons are business owners sharing equal profit and loss in business.
Moreover, the division of income is equal among all the partners; hence the imposition of income tax is also equal for all the partners, no matter the strength of partners are 2 or 20. Government has set up beautiful system for income tax matters and this is the reason that peaceful tax collection is done by government to make things running. After sole proprietorship and partnership business, join stock companies are also included in business category where the tax matters are implemented according to the status and income of company. Usually companies are of two types where private limited and public limited companies are the most notable companies. The taxation matters for all the companies is same, the responsibility of government is to collect the tax after looking at the business status and position.