Does the Government pay tax on its own income through tax collection?

Replies

• 

  ISHAN TOPRE

  Government agencies need to file tax and they do pay their taxes on time.
• 

  Kaustubh Katdare

  Issue

  Government agencies need to file tax and they do pay their taxes on time.

  Who does the government pay taxes to? Self?
• 

  ISHAN TOPRE

  Kaustubh Katdare

  Who does the government pay taxes to? Self?

  I thought you would ask this question. The answer is yes.
  
  There are two types of departments.
  1. Public service.
  2. Profit earning.
  
  Public service department means departments like police, home ministry, foreign ministry etc. They do not file income tax as they do not have any income/ profit.
  
  While departments (meaning) PSUs (or any income earning) owned by government have to file their returns as per IT laws.
  
  The money goes to 'central treasury' the same place where your and my money goes.
  
  Remember that any person/ Government/ Govt. department has to pay tax on any income which goes to Central treasury. Audit is done for everyone.
  
  For further info, you may want to know about CAG (comptroller and auditor general)