Budget, does it goes over your head? Beginning of every month, you must have heard your parents talk about how are they going to spend and save their earned money/salary. When asked for a toy or anything you want, have you heard your parents say, not this month, will definitely get it next month. This is simple called budgeting.
Budget, is nothing but planning one’s finances/money over a period of time. At home, your mother/father with the income (income from salary, business, rent received, etc) earned, they will calculate monthly expenditures – for instance, grocery, bills, fees, etc. And they estimate unseen expenditures like illness, repair works, emergency, etc. Apart from that, your parents have to pay for the loan, if any. Loan to buy car, house, etc. With the remaining money they have to save and also they need money for everyday expenditure, for instance buying chocolates, chips, ice-cream, etc. This estimate of income and expenditure is called budget. Budget can be prepared for a person, family, business, company and government.
Union Budget of India
The Union Budget of India is referred to as the Annual Financial Statement in the Article 112 of the Constitution of India. Union Budget of India – Government plan its revenue (income) and expenditure for a period of one year. The government presents it on February 1, every year.
Government earns income/revenue can be divided into Tax revenue and non-tax revenue.
Tax revenues are: Taxes collected taxes are levied on commodities produced within the country. Custom duties include duties levied on both import and export. Other sources of tax are – Income tax, corporation tax, wealth tax, gift tax, Capital Gains Tax, Hotel expenditure tax, foreign travel tax.
Non-tax revenues are: Interest Receipts, surplus profit of RBI, currency, coinage and mint, railways and profits of public enterprise.
Government spends the income earned through above sources on country’s infrastructure -railways, airways, roadways- highways. healthcare, agriculture, energy, education, welfare schemes, defence, etc.
Tax: A compulsory contribution to state revenue, levied by the government on workers’ income and business profits, or added to the cost of some goods, services, and transactions.
Duties: Customs duty is a tax that people pay for importing and exporting goods
Difference between tax and duty: Tax is charged on individuals, wealth, services and sales, whereas Duty is charged on goods.