History Of Taxation In India

Overview

The human life is woven in a web of rights, duties and obligation. A country cannot function without laws. These rights and duties and obligations find their origin in some or the other statutes or the supreme law of land, “Constitution”. With the ever increasing industrialization and globalization, cross-border transactions have increased manifold. The Indian economy is growing and with the benefits accruing to the citizen as well as the non-citizen, burden being imposed on them in the form of tax is apparent.

Taxation is a statutory field. No tax can be levied or collected except according to authority of law. Taxation is a vast subject. Indian taxing statutes are complex due to variety of reasons. The taxation is ever expanding

The major chunk of income India earned was by exporting jute and tea in which India enjoyed monopoly status in the world. Most of the major imports were from Britain which charged heavy import duties. Further many enactments like, the Sea Customs Act, 1878; and the Tariff Act, 1934 were repealed and the Customs Act, 1962 and Customs Tariff Act, 1934 came into being. Further, taxes in different form were imposed on several commodities even in ancient times. Reference with regard to taxation has also been made in Manu Smriti and Arthshashtras. Various saints have mentioned about the tax being charged by the king for the effective functioning of the administration. The tax played the major source of revenue which was utilized for the effectiveness of the military and for general administration like maintenance of roads, public sanitation or temples. The system of taxation was not homogenous during those days. It was highly uncertain. There was no specific mechanism which governed the taxation. Further, it was collected both in the form of cash or

It serves as a source of income for the government. The responsibility for collection of income tax vests in the Central Government which is collected under the purview of Income Tax Act, 1961. “Income Tax is levied on the total income of the previous year of every person.”

International Taxation

The theory of international tax treaties is covered under the concept of International Taxation. With the increasing cross border transactions, mergers and acquisitions, growth of multinationals, the countries are even shifting their focus and approach to India. India is the world 's largest democracy and one of the fastest growing economies. In such a growth accelerated scenario, it is important that the country 's tax and regulatory policies are well understood for success opportunities.

The Indian business houses are also interested in making money from the international market and are even making a way for the overseas business houses to enter the Indian Industry which can only be achieved through the interplay of cross border taxes and regulations for converging on a suitable