In 1918, another Act- Income Tax Act, 1918 was passed but it was short lived and was replace neone Tax Act, 1922 and it remained in existence and operation till 31st.

Taxes consist of direct tax or indirect tax, and may be paid in money or as its labour equivalent (often but not always unpaid labour).

The tax system in India is mainly a three tier system which is based between the Central, State Government and the local government organizations.

In most cases, these local bodies include the local councils and the unl ip I)bties.

According to the Constitution of India, the government has the right to levy taxes on individuals an orgary ations.

However, the constitution states that no one has the right to levy or charge taxes except the author t Evaluations of tax system in India: It is the basic object of Public Finance to maximize the welfare of the society, by ensu i ational allocation of resources in conformity with the economys priorities.

The development of a nation t larg depends upon the mobilization of revenue and its spending.

The salient charac r t a federal government is legislative autonomy and financial independence.

Historical background plays an important role in the financial settlements g ve nments.

A close observation of financial settlements in the past will help us to understand the present syste The Regularity Act of 1773 and Character Act of 1833 were the begi run o tin ncial settlements in unified India.

Thereafter, steps towards the separation of tax resources between,tty enter and the provinces were taken on the recommendations of Mr.

Montague, the then Secretary of Stat for ndiag,n 919.

As far as Income tax is concerned, there is enough evidence o ow at taxes on income in some form or the other were levied even in primitive and ancient communities.

Reference to axes in ancient India are found in Manusmriti and Kautilyas Arthashastra.

Manu the ancient sage nd iver stated that king should levy taxes according to sastras.

He advised that taxes should be related to erpd should not be excessive.

He laid down that traders and artisans should pay 15th of their profits in gol nd Silver, while the agriculturists were to pay 16th, 18th and 1 10th of their produce depending upon thei Irc ms ances.

The detailed analysis given by Manu on the subject clearly shows the existence of a well plann Ex tion system, even in ancient times.

Kautilyas Arthasastra was the first authoritative text on public finance, a mrustration and the fiscal laws.

Collection of income tax was well organized during Mauryan Empire.

It is remarkle that the present day system of taxation is in many ways similar to the system of taxation given by Kau il 30 years ago.

In modern India it was i fr ce4, or the first time in 1860 by British rulers following the mutiny of 1857.

The period between 1860 and 18 eriod of experiments in the context of Income Tax.

This period ended in 1886 when first Income Tax.ct ameeJn o existence.

Quick Notes In Taxation De Vera Pdf