INTRODUCTION
History of Income Tax
To run any dynasty or any country the primary source for it treasury is collection of money
funds by any means of law. One such law is taxation law which finds memoirs from
century’s date back. The levy of taxes is treated as a source for collection of revenue which is
used for running the state and itswelfare.
In ancient era the kings’, Governments used varied taxes which includes wealth, property,
trade and varied activities.
England was the first country which tried to collect taxes as Income Tax from the labourers
and earners i.e. whatsoever earn on wages, a part of it is to be given as Income Tax it was the
decision of the administration in England which was very much opposed by the public as a
result it was remanded back and all the tax records were burned by the public. Again for the
second time Britain introduced Income Tax in 1799 which was also repealed in the year 1816
as it found large outcry among [Link] the country was taking manymeasure to collect
taxes and finally in the year 1842 the Income Tax was introduced in Britain.
The source of Income Tax levied by Britain found many takers and many countries including
Sweden, Netherlands, Germany, Canada and Switzerland stated to collect Income Tax from
its citizen. Almost in maximum countries Income Tax was stated to be collected by the end
of 19th Century.
Bachelor Tax- Bachelor Tax was stated to be collected in Italy by Mussolini from December
20, [Link] aim was to collect revenue so that Italy can become superpower and with an
idea in mind that if all the unmarried men of age between 21 to50 are imposed a bachelor tax
the Government. Kitty will swell. As a result the Population of 40 million odd was levied
taxes number of times.
Similarly with the aim to finance and collect revenue for military reforms Peter the great of
Russian in the year 1718 introduced a Soul Tax on all males with exception of the clergy and
the nobles. The soul tax succeeded and the military reforms too.
Till 1949 the salt tax was levied by Napoleon Bonaparte to fund military emergencies,
Defensepurchase so that he can fund his army towards Italy.
History of Taxation in India- It is said that every citizen should have an mandatory liability
towards tax and everyone should pay it voluntarily. The ancient text of Manu Smriti and
Arthasastra finds the origin of the taxation system and regime in ancient India. This text
clarifies that theory behind tax collected to be utilized for the maximum social welfare of the
state.
It was Kalidas in Raghuvansh eulogizing king Dalip has written. “It was only for the good of
this subject that he collected taxes from them, just as the sun draws moisture from the earth
to give it back a thousand fold”.The word tax is derived from Taxation which means an
[Link] Income Tax system is a direct tax collection of income from the citizen both
Manu Smriti and Arthasastrahas advised to collect taxes as such it should not be too harsh
and easily payable by all traders, artisans agriculturalist etc.
Both text argues that a portion of Income should be deposited as tax with the king. The
levying of tax percent can be increased depending upon the conditions of the state. A prudent
king should not levy excess tax, neither exempt all from the tax. Arthasastra has a very little
scope for opposing and appeal as the schedule of each payments, percentage, quality manners
and every aspect of it are all pre-determined by the Tax collectors after approval from king.
Kautilya who was the economist in the MauryanEmpire described in detail the tax
administration which resembles with the modern day taxation in India. He emphasized the
concept of equity and justice in taxation. The poor has to pay less tax as compared to
affluentand richer people who can contribute more for the state. According to him treasury is
the root of administration (koshmoolodandah) which in the present logo of Income tax
Department.
In the year 1860, the Government suffered majority and losses due to military mutiny of
[Link] order to overcome the losses and deficit Sir. James Wilson introduced Income Tax
for the First time in 1860.A new Income Tax act was passed in 1918 which got replaced in
1922 and was in force till the Assessment year 1961-62. During this period numerous
amendments were also passed.
Finally the Income Tax Act 1961 which in still prevalent today was passed with the
consultation of Ministry of Law. It applies to the whole of India and Sikkim (including
Jammu and Kashmir) and is an force with affect them 1 April [Link] then every year in
the Union budget Presented by Government numerous amendments has been made in
consultation will Finance Ministry, Society and public at [Link] collection of Income tax
in India the Central Board of Direct Taxes (CBDT) was constituted under the Central Board
Of Revenue Act 1963.
The Income Tax Act imposes a tax which is reviewed and discussed every budget imposes
tax under the following heads:-
1) Income From salaries
2) Income from Business and profession
3) Income In the form of Capital gains
4) Income for house property
5) Income from other sources
Utility of the Study of Research
The study on the research management of tax planning (by Government of India) with respect to
increase in tax payer base their awareness and tendency will be useful for taxpayer, common
citizens even who are not taxpayer, students of tax practice and the Government. The Study will
help common man understand the benefits of paying taxes and helping the country by being
honest taxpayer. The Study also provides as an eye opener to the tax evaders and the litigations
that can be avoided (GST, other indirect taxes, investment can be correlated) The Study will be
beneficial to many scholars of National and International status having a touch and knowledge
on the management of tax planning (by Government of India) with respect to increase in tax
payer base their awareness and tendency
Limitations of the Study
The Study in limited to Mumbai city only. The data utilized and collected is factual. The sample
survey done is limited to 25 in every group of [Link] study on this management of tax
planning (by Government of India) with respect to increase in tax payer base their awareness and
tendency is a critical document with respect to the no of people who had enrolled them as
taxpayer and the actual no of people paying taxes and filling returns. The study also provides
analysis on attitude towards paying taxes among the citizens.
Scope
The Study will primarily be limited to Mumbai a metropolitan city which has an overall
collection of 40% taxes of the direct tax budget. The city has tax payer them all sections,
profession of society. Taxpayers from all the fields are studied in detail, along with the non
taxpayers from unorganized sector. The study will help the researchers to further study the
subject of national importance.