The tax imposed on an individual or an entity depending on the amount of income or even profits they receive is known as the personal tax. The amount of personal tax one is required to pay is determined by the rates imposed in the given state or country on the incomes and profits. Personal tax is usually imposed in a progressive way where the amount of the personal tax increases as the incomes and profits of the individual increases. The income used for calculation of personal tax for resident individuals in a given state or country is usually their total income less any activity that generates tax and other deductions imposed. Another income source that can be used to determine personal tax is the net gain obtained after sale of any property such as goods for sale. For non-resident individuals in the country or state, personal tax is only imposed of income sources of certain activities carried within the region.
There are various principles that govern the personal tax systems and how it is imposed on individuals such as the taxpayers and rates, residents and non-residents, defining income, deductions allowed, business profits among others. Individuals and entities that have not been legally identified as corporations are usually imposed on personal tax where the rates depends on the slab where the income falls. The defining income where personal tax is charged may include the money they receive from services compensation, sale of property and goods, dividends, interest, royalties, rents, pensions, annuities among others. Incomes obtained from superannuation and national payment plans after retirement are usually exempted from personal tax.
Personal tax is to be paid on regular basis depending on how one obtains their income. Payment can be done easily through the online system provided by the bodies mandated with these activities. Payment on time of the personal tax is usually done to avoid penalties one is likely to be slapped with by the regulating body. When one is slapped with these penalties and interest, one should pay them soonest possible to avoid them accruing as time moves on.
There are several benefits one is likely to enjoy from payment of personal tax other than been exempted from penalties and interests. It is easy to obtain loans from financial lending institutions for personal development if one complies with the laws of the given state through payment of personal tax. When visiting some countries that requires one to show their credibility through payment of personal tax, a person whose compliance is excellent will be granted the travel visa easily. A person who faithfully pays personal tax is very likely to win a government tender or those from public institutions since they will get the compliance certificates needed during tender application.