Tax Breaks

Tax Breaks

Subject – Economy

Context – To make the National Monetisation Pipeline (NMP) a success, the government should give Income Tax breaks to attract retail investors into instruments such as Infrastructure Investment Trusts (InvITs), the NITI Aayog has recommended.

Concept –

• A tax break is a reduction of a taxpayer’s total liability.
• If the government gives a tax break to a particular group of people or type of organization, then it reduces the amount of tax that they otherwise would have to pay or changes the tax system in a way that benefits them.
• There are three types of tax breaks: a tax deduction, a tax credit, and a tax exemption.