The imposition or payment of Tax can be the exact meaning of taxation. It is a contribution towards state revenue. It is that situation that is compulsorily viewed on individuals, property, or businesses. In most developing countries, the taxation policy aims at the promotion of agriculture & industry. In early stages of the developmental program for small scale industries the Government had provided a member of taxation benefits with adequate incentives. Taxation have two important objectives that is to promote investment in industries & to provide relief to income tax excise duty, sales tax, electricity duty Apart from these, small scale industries are entitled to central capital. In the present context of rapid economic development particularly in the rural areas, taxation benefits must be viewed in relation to the need for increasing investment in small industries & ancillary industries and discouraging speculative investments in unproductive activities.