The Central Government of India levies taxes such as customs duty, income tax, service tax, and central excise duty. The taxation system in India empowers the state governments to levy income tax on agricultural income, professional tax, value added tax (VAT), state excise duty, land revenue and stamp duty.
Who imposed income tax in India?
To fill the treasury, the first Income-tax Act was introduced in February 1860 by Sir James Wilson (British India’s first finance minister). The act received the assent of the governor-general on 24 July 1860, and came into effect immediately. It was divided into 21 parts, with 259 sections.
Who can impose income tax?
Any Indian citizen aged below 60 years is liable to pay income tax, if their income exceeds Rs 2.5 lakhs. If the individual is above 60 years of age and earns more than Rs 2.5 lakhs, he/she will have to pay taxes to the Government of India.
Which Government collects income tax in India?
The revenue functions of the Government of India are managed by the Ministry of Finance. The Finance Ministry has entrusted the task of administration of direct taxes like Income-tax, Wealth tax, etc., to the Central Board of Direct Taxes (CBDT). The CBDT is a part of Department of Revenue in the Ministry of Finance.
When did India first Income Tax Act come into being?
Income-tax Act, 1961 came into existence w.e.f. 1-4-1962. Revenue Audit introduced for the first time in the Department.
When was income tax first introduced?
The financial requirements of the Civil War prompted the first American income tax in 1861. At first, Congress placed a flat 3-percent tax on all incomes over $800 and later modified this principle to include a graduated tax.
Who started income tax?
Incoming President Woodrow Wilson pushed for the Revenue Act of 1913, which included the income tax along with changes in tariffs. The first 1040 form appeared in 1914.
Who is responsible for formulating and enforcing direct taxes in India?
1964. This bifurcation was brought about by constitution of the two Boards u/s 3 of the Central Boards of Revenue Act, 1963. Organisational Structure of the Central Board of Direct Taxes : The Chairman, who is also an ex-officio Special Secretary to Government of India, heads the CBDT.
Why was income tax introduced?
Income tax was first implemented in Great Britain by William Pitt the Younger in his budget of December 1798 to pay for weapons and equipment in preparation for the Napoleonic Wars.
Do Government employees pay income tax in India?
It is fully exempt for Central and State government employees. For non-government employees, the least of the following three is exempt. The amount chargeable to tax shall be the total leave encashment received minus exemption calculated as above. This is added to your income from salary.