2. Unit 2
Sources of taxes:
Loans ,grants, and Aid meaning
types of canons of taxation,
problems of justice in taxation,
incidence of taxation,
taxable capacity ,
impact of taxation, tax evasion,
characteristic of Indian tax systems ,
defects and steps of reform
9. Grant. Loan. Meaning.
Grants are the financial aid awarded by the government for a specific
purpose. Loan refers to the financial assistance provided by the banks or a
financial institution to the borrower, which is repayable after some time with
interest.
A grant-in-aid is money coming from a central government for a specific
project. This kind of funding is usually used when the government and
parliament have decided that the recipient should be publicly funded but operate
with reasonable independence from the state.
How a Government Grant Works?
Government grants aren't just bestowed: They have to be applied for. Getting a
government grant is an extremely competitive process. The paperwork is
complex and applicants must describe how the awarded funds will benefit the
local community or the public at large. Crafting a convincing proposal is so
challenging that applicants often hire professional help. Some freelance writers
specialize in writing grant proposals.
10. Grants vs. Loans
The main difference between a grant and a loan is repayment. A loan requires you to
repay the money you borrow, whereas a grant does not. Grants are, essentially, a gift. In
other words, they’re non-repayable.
Grants may be awarded by government departments, trusts, or corporations and given to
individuals, businesses, educational institutions, or non-profits.
Loans are generally given by banks to both individuals and businesses, but private lenders
or individuals (e.g., family and friends) may also offer loans.
The Advantages of a Loan
There are some advantages to taking out a loan instead of applying for a grant.
Greater opportunities:
When comparing grants vs. loans, loans offer more opportunities. There is a limited
number of grants available.
More financing available:
Grants are also limited in the amount of financing they can provide. In most cases, grant
programs are sponsored by government departments and only a certain amount of
funding is available each year
11. The Advantages of a Grant:
Grants offer a number of benefits that any person in need of funding should consider.
No repayment necessary:
Grants are non-repayable. Once you’re awarded the grant money, it’s yours without any
strings attached. There’s no need to worry about monthly payments or piling on more
debt. Repayment is the fundamental difference between a grant and a loan, and also what
makes grants more valuable than loans.
No risk:
Grants are a no-risk way to obtain the financing you need. If a loan is not repaid, you put
your credit rating and assets in jeopardy. Grants do not require repayment and will only
benefit you or your business.
