History of income tax in India

  • In India the tax was introduced for the first time in 1860 by sir James Wilson in order to meet the loss obtained by the government on the account of the military mutiny of 1857
  • in 1866, a separate income tax act was passed this act remained in force upto 1917, with various amendments from time to time
  • in 1918, a new Income Tax Act was passed and again it was replaced by another new act which was passed in 1922. this act remained in force after the assessment year 1961-62 with numerous amendments
  • the Income-Tax act of 1922 has become very complicated on account of innumerable amendment s. the Government of therefore reffered it to the law commission in 1956 with a view to simplify and for the prevention of tax evasion. The Law Commission submitted its report in September 1958, but in the meantime the Government of India has appointed the direct tax administration enquiry committee to suggest measures to minimise inconvenience to accessories and to prevent evasion of tax committee submitted its report in 1959 in consultation with the ministry of law finally that Income Tax Act 1961 was passed
  • the Income Tax Act 1961 has been brought into force with effect from 1st April, 1962. it apply to whole of India and Sikkim (including Jammu and Kashmir)
  • since 1962 several amendments of far- reaching nature have been made in the Income Tax Act by the finance act every year
  • Beside this, amendments have also been made by various Amendment Act for instance, taxation law Amendment Act 1984,  direct tax Amendment Act 1987,  direct tax Law Act of 1988 and 1989, direct tax Law Act 1989 and at the last taxation Law Act 1991. the amendments in the finance act 1992 or 1993 are mostly based on the Recommendation of Chelliah Committee report
  • as a matter of fact the Income Tax Act 1961 which came into force on 1st April 1962 has been amended and re-amended widely. it has therefore become very complicated for both the administrative authority and tax payers. 
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