The government collects tax for meeting its different expenses. The government uses these tax collections for meeting different expenses like expenses on the infrastructure, defense, welfare schemes, education, and health. The taxes are collected by the government through a system. Many times government covers these expenses takes the loan and raises money from other means too. Income tax is a very important means of collecting revenue among the other sources. According to the report of Times of India,28 percent of the government s revenue was contributed by the taxpayers in 2020-21.
This figure becomes more interesting when we get to know that out of this only 1 percent of the people give income tax. In the budget, Nirmala Sitaraman our finance minister recognize the efforts of the income taxpayers but recently in an interview given by Subrahmanyam swami, he talked about the abolition of income tax.
Through this article let’s discuss the aspects of income tax.
ABOUT THE TAX
We have two tax that is DIRECT and INDIRECT taxes. The tax like income tax, property tax, etc directly given to the government is called the direct tax. Whereas the tax collected by the government through its intermediary is called indirect tax According to the reports of business standards, talking about direct taxes, it is very interesting to know that in the last fiscal year, India itself collected about rs.9.45 trillion only from corporate taxes and individual taxes.
This itself signifies how much important the income tax is as a source of revenue for the government’s treasury. If we see individually, we will find that the corporate houses have given nearly rs.4 lakh to the government in form of taxes whereas individual has given nearly rs.4.5 lakh to the government as taxes. Despite corona and pandemic situations many businesses got shut, many lost their jobs but the curve of taxes so collected showed an upward swing which was even more than the government’s estimates.
HISTORY OF INCOME TAX
In India, this tax was introduced for the primary time in 1860, by Sir American Revolutionary leader to
meet the losses sustained by the govt. Because of the result of the Military Mutiny of 1857. Thereafter, several amendments were created in it from time to time. In
1886, a separate taxation act was passed. This act remained operative up to, with
various amendments from time to time. In 1918, replacement taxation was passed and once more it
was replaced by another new act that was passed in 1922.
This Act remained operative up to
the assessment year 1961-62 with various amendments. The taxation Act 1961 has
been brought into force with Apr 1962. It applies to the complete of Asian countries and
Sikkim(including Jammu and Kashmir).Since 1962 many amendments of comprehensive
nature are created within the taxation Act by the Union Budget per annum.
Income tax has a long history and its amendments have a long history but what one should understand is the thing which has so much historical past somewhere needs reforms and transformations too. We need that. Over some time there were many amendments done but still money laundering, black income is a challenge.