This is the question .

I am submitting different canons of taxation below which is provided from college .

. please help immediately.

Instructions Submit any 3 situations where India has proved that it has adhered to the cannons of taxation and 3 situations where it has not. You can be as creative as possible in your submission. Simple write ups are also accepted.....but try pushing your creative side to the best. However, ensure your answers are facts and not fictitious situations. Canons of Taxation: Canons of Taxation are the main basic principles (.e. rules) set to build a 'Good Tax System'. Canons of Taxation were first originally laid down by economist Adam Smith in his famous book "The Wealth of Nations". In this book, Adam smith only gave four canons of taxation. These original four canons are now known as the "Original or Main Canons of Taxation". 1. Canon of Equity The principle aims at providing economic and social justice to the people. According to this principle, every person should pay to the government depending upon his ability to pay. The rich class people should pay higher taxes to the government, because without the protection of the government authorities (Police, Defence, etc.) they could not have earned and enjoyed their income. Adam Smith argued that the taxes should be proportional to income, i.e., citizens should pay the taxes in proportion to the revenue which they respectively enjoy under the protection of the state. 2. Canon of Certainty According to Adam Smith, the tax which an individual has to pay should be certain, not arbitrary. The tax payer should know in advance how much tax he has to pay, at what time he has to pay the tax, and in what form the tax is to be paid to the government. In other words, every tax should satisfy the canon of certainty. At the same time a good tax system also ensures that the government is also certain about the amount that will be collected by way of tax. 3. Canon of Convenience The mode and timing of tax payment should be as far as possible, convenient to the tax payers. For example, land revenue is collected at time of harvest, income tax is deducted at source etc. Convenient tax system will encourage people to pay tax and will increase tax revenue. 4. Canon of Economy This principle states that there should be economy in tax administration. The cost of tax collection should be lower than the amount of tax collected. It may not serve any purpose, if the taxes imposed are widespread but are difficult to administer. Therefore, it would make no sense to impose certain taxes, if it is difficult to administer. Additional Canons of Taxation: Activities and functions of the government have increased significantly since Adam Smith's time. Government is expected to maintain economic stability, full employment, reduce income in-equality & promote growth and development. Tax system should be such that it meets the requirements of growing state activities. Accordingly, modern economists gave following additional canons of taxation 5. Canon of Productivity: It is also known as the canon of fiscal adequacy, According to this principle, the tax system should be able to yield enough revenue for the treasury and the government should have no need to resort to deficit financing. This is a good principle to follow in a developing economy. 6. Canon of Elasticity According to this canon, every tax imposed by the government should be elastic in nature. In words, the income from tax should be capable of increasing or decreasing according to the requ SUU Veuwes BTT UTE OTIUM UFO WIELUEU Tum Ho Serve any purpose, rue UGRES PUSE are widespread but are difficult to administer. Therefore, it would make no sense to impose certain taxes, if it is difficult to administer. Additional Canons of Taxation: Activities and functions of the government have increased significantly since Adam Smith's time. Government is expected to maintain economic stability, full employment, reduce income in-equality & promote growth and development. Tax system should be such that it meets the requirements of growing state activities. Accordingly, modern economists gave following additional canons of taxation 5. Canon of Productivity: it is also known as the canon of fiscal adequacy. According to this principle, the tax system should be able to yield enough revenue for the treasury and the government should have no need to resort to deficit financing. This is a good principle to follow in a developing economy. 6. Canon of Flasticity According to this canon, every tax imposed by the government should be elastic in nature. In other words, the income from tax should be capable of increasing or decreasing according to the requirement of the country. For example, if the government needs more income at time of crisis, the tax should be capable of yielding more income through increase in its rate. 7. Canon of Flexibility It should be easily possible for the authorities to revise the tax structure both with respect to its coverage and rates, to sult the changing requirements of the economy. With changing time and conditions the tax system needs to be changed without much difficulty. The tax system must be flexible and not rigid 8. Canon of Simplicity The tax system should not be complicated. That makes it difficult to understand and administer and results in problems of interpretation and disputes In India, the efforts of the government in recent years have been to make the system simple, 9. Canon of Diversity This principle states that the government should collect taxes from different sources rather than concentrating on a single source of tax. It is not advisable for the government to depend upon a single source of tax, it may result in inequity to the certain section of the society, uncertainty for the government to raise funds. If the tax revenue comes from diversified source, then any reduction in tax revenue on account of any one cause is bound to be small