History of Taxation in India

prasad Nilugal | Last updated: 08 July 2024

Save Share

Quick Summary

The history of taxation in India spans over three centuries, with its roots in Vedic times when it was considered a sacred duty. Emperor Krishnadevraya introduced progressive taxation, while British rule brought significant changes, including the introduction of income tax in 1860. Over the years, various acts and reforms, such as the introduction of Supertax, comprehensive income tax laws, and the establishment of ITAT, CBDT, and CBIC, have shaped the tax landscape, culminating in the introduction of GST in 2017.

Taxation in India has been through a long journey of three centuries to reach where it stands today.

We have tried to explain the journey chronologically at the following points: I hope you will enjoy reading it.

1. Taxation was considered a sacred duty even in Vedic times.

2. The system of progressive taxation in India was introduced by Emperor Krishnadevraya of Vijaynagaram.

History of Taxation in India: A 3-Century Journey

3. The period of British rule in India witnessed many remarkable changes in the taxation system in India.

4. Income tax in India was introduced by Sir James Wilson on July 24, 1860.

5. In the first year, the exchequer collected Rs 30 lacs, a princely sum at that time.

6. The Act lapsed in 1865 and was reintroduced in a refurbished form in 1867.

7. Governor General Load Dufferin introduced the Income Tax Act of 1886. Rs 1.36 crore was collected in the years 1886-87.

8. During 1914-15, the total number of income taxpayers was 3,32,000.

9. "Supertax was introduced in 1917.

10. Income tax collection during the years 1918-19 stood at Rs 11 crore.

11. A comprehensive income tax law was brought out in 1922.

12. ITAT (Income Tax Applet Tribunal) came into existence on April 25, 1941.

13. Income tax collection during 1939-40 was to the tune of Rs 19.82 crore.

14. In 1944, the Central Excise Act was introduced as an indirect tax in India.

15. The Indian Revenue Service was introduced in 1945.

16. Income tax collection for the years 1945-46 stood at Rs. 57.12 crore.

17. The Central Sales Tax Act was introduced in 1956.

18. Professor Nicholas Kaldor was instrumental in the introduction of acts like the Wealth Tax Act of 1957, the Expenditure Act of 1957, and the Gift Tax Act of 1958.

19. The Income Tax Act was introduced in 1961.

20. The Customs Act was introduced in 1962.

21. CBDT and CBIC were two boards introduced in 1963 for administering direct and indirect taxes, respectively.

22. Direct tax collection for 1960-61 stood at Rs 287.47 crore.

23. An attempt to create a PAN (9 digits and 2 letters) in 1970-71 was aborted due to a lack of appropriate technology at the time. It was only introduced after 25 years.

24. 1500 crore was disclosed as undisclosed income under the Voluntary Disclose Scheme, 1975.

25. In 1993, the Authority of Advance Ruling was set up..

26. PAN (10-digit number) was launched in 1994.

A service tax was introduced in 1994.

28. MAT was introduced in 1997.

29. Direct tax collection for 1996-97 stood at 38895 crore.

30. VAT was introduced on April 1, 2005.

31. The website of the Income Tax Department was launched in 2003.

32 E. Filing System was launched during 2006-07. In its very first year, 3.63 lac taxpayers availed of this facility.

33. The TRP scheme was launched in 2006.

34. CPC was set up in Bengaluru in 2009.

35. Goods and Services Taxes were introduced in 2017 by abolishing many taxes as one nation, one tax.

FAQ :

Income tax was first introduced in India by Sir James Wilson on July 24, 1860.

The system of progressive taxation in India was introduced by Emperor Krishnadevraya of Vijaynagaram.

The Central Excise Act was introduced as an indirect tax in India in 1944.

Goods and Services Tax (GST) was introduced in India in 2017, consolidating many existing taxes.

A 10-digit PAN (Permanent Account Number) card was launched in 1994 to facilitate tax administration.

Professor Nicholas Kaldor was instrumental in the introduction of acts like the Wealth Tax Act of 1957, the Expenditure Act of 1957, and the Gift Tax Act of 1958.