Every government needs to provide good infrastructure and services to its people. But to do this the government needs to have separate funds earmarked for development. To gather funds, governments opt to levy taxes on their citizens. Many types of taxes in India are levied on the public.
In India, the taxation system has a proper structure where the taxes are divided into two categories: Direct taxes and Indirect taxes are the two main types of taxes in India. Different types of taxes in India are categorized under each type for better clarity.
The taxation system is implemented by the central government, state government, and local municipalities. These three tiers of government play a major role in the Indian taxation system. Each tier of government has the authority to impose a specific tax.
More details about the types of taxes in India and the Indian Taxation System have been discussed in this article. Read further to understand the different types of taxes and the benefits of the Indian taxation system.
When was the Income Tax introduced in India?
Income Tax in India was first introduced in 1860 by the then Finance Minister Sir James Willson. The British government suffered heavy losses during the 1857 mutiny in India. Income tax was introduced in India to recover from those losses.
The Indian Income Tax Act of 1860 marks a significant moment for taxation in Indian history. With the introduction of this Act, the British government started to collect taxes from the public.
Under this Act, Income Tax was divided into four categories based on the source of income. They were:
Land
Profession/Trade
Securities
Salaries/Pensions
Although this Act has been revised and replaced over time, it is still considered to be the basis for Indian Taxation Laws.
In India, the taxation system has a proper structure where the taxes are divided into two categories: Direct taxes and Indirect taxes are the two main types of taxes in India. Different types of taxes in India are categorized under each type for better clarity.
The taxation system is implemented by the central government, state government, and local municipalities. These three tiers of government play a major role in the Indian taxation system. Each tier of government has the authority to impose a specific tax.
More details about the types of taxes in India and the Indian Taxation System have been discussed in this article. Read further to understand the different types of taxes and the benefits of the Indian taxation system.
When was the Income Tax introduced in India?
Income Tax in India was first introduced in 1860 by the then Finance Minister Sir James Willson. The British government suffered heavy losses during the 1857 mutiny in India. Income tax was introduced in India to recover from those losses.
The Indian Income Tax Act of 1860 marks a significant moment for taxation in Indian history. With the introduction of this Act, the British government started to collect taxes from the public.
Under this Act, Income Tax was divided into four categories based on the source of income. They were:
Land
Profession/Trade
Securities
Salaries/Pensions
Although this Act has been revised and replaced over time, it is still considered to be the basis for Indian Taxation Laws.