The concept of taxing income is a modern innovation and presupposes several things: a money economy, reasonably accurate accounts

, a common understanding of receipts, expenses and profits, and an orderly society with reliable records. For most of the history of civilization, these preconditions did not exist, and taxes were based on other factors. Taxes on wealth, social position, and ownership of the means of production (typically land and slaves) were all common. Practices such as tithing, or an offering of firstfruits, existed from ancient times, and can be regarded as a precursor of the income tax, but they lacked precision and certainly were not based on a concept of net increase.

[edit] Han Dynasty (ancient China)
In the year 10, Emperor Wang Mang of the Xin Dynasty instituted an unprecedented tax -- the income tax -- at the rate of 10 percent of profits, for professionals and skilled labor. (Previously, all taxes were either head tax or property tax.) He was overthrown 13 years later in 23 CE and earlier laissez-faire policies were restored during the Later Han.

Kingdom of Great Britain
Another income tax was implemented in Britain by William Pitt the Younger in his budget of December 1798 to pay for weapons and equipment in preparation for the Napoleonic wars. Pitt's new graduated income tax began at a levy of 2d in the pound (0.8333%) on incomes over £60 and increased up to a maximum of 2s in the pound (10%) on incomes of over £200 (£170,542 in 2007). Pitt hoped that the new income tax would raise £10 million (£8,527,100,000 in 2007) but actual receipts for 1799 totalled just over £6 million (see UK income tax history for more information).[3]

United States
Main article: Income tax in the United States The first United States income tax was imposed in July 1861, at 3% of all incomes over 800 dollars in order to help pay for the war effort in the American Civil War.[4][5] This tax was repealed and replaced by another income tax in 1862. [6]

India Income tax slabs 2010-2011 for General tax payers
Income tax slab (in Rs.) 0 to 1,60,000 1,60,001 to 5,00,000 5,00,001 to 8,00,000 Above 8,00,000 Tax No tax 10% 20% 30%

stamp duty. The Central Government is primarily responsible for imposing taxes on income. Ministry of Finance.90. custom duties.40.00.000 DIRECT TAX Tax No tax 10% 20% 30% A Direct tax is a kind of charge.00. In India.001 to 8. CBDT is responsible for formulating and enforcing direct taxes in India.000 Tax No tax 10% 20% 30% India Income tax slabs 2010-2011 for Senior citizen Income tax slab (in Rs.) 0 to 2. One of the vital functions of CBDT is to administer direct taxes law followed by Income Tax Department.000 Above 8.00.India Income tax slabs 2010-2011 for Women Income tax slab (in Rs. The examples of direct tax include property tax and income tax. central excise and service tax.001 to 5. all the direct tax related matters are taken care by the Central Board of Direct Taxes (CBDT). The State Government is responsible for levying taxes like State Excise.000 Above 8.000 5. it can be said that a direct tax is one that is taken away from one's salary or wages.) 0 to 1.001 to 5. Indirect Tax or the tax that is levied on goods or services rather than on persons or organizations are of different types in India like Excise Duty.00.90.00. The tax system in India is primarily demarcated under the control of Central and State Government. octroi and many more. which is a significant division of the Department of Revenue.000 1.000 2. Government of India. which is also a direct tax.00. Customs Duty. VAT (Value Added Tax).001 to 8. Service .00. When the tax is imposed by the government upon the property.40. CBDT is functioning under the Central Board of Revenue Act 1963. The local bodies are also authorized to impose tax on properties.000 5. Alternatively. then it is called property tax. which is imposed directly on the taxpayer.00. land revenue and professional tax.

As a result these taxes are an important part of the total cost. etc. which have become redundant. Some of the common tax-saving instruments include General Provident Fund (GPF). It is thus essential to make appropriate planning for such costs. As a result Indirect Tax has an impact on all business lines. 10. NSC/NSS. Social Security. so that the amount of net tax to be paid is comparatively reduced at the time of filing your returns. but also at the same time would lead to a certain extent of uncertainty and judicial proceedings. Salaries. Activities related to trading. The proprietor needs to pay tax every year on property owned by them. Education Cess Rs. debt. At present the Indirect Taxes in India are under a transformation due to the changing fiscal reforms of the Indian government. Nearly all of the activities that are subjected to indirect taxation range from manufacturing to those required for final consumption. Public Provident Fund (PPF). In India. a further deduction is allowed of certain amount from the tax computed on the income earned by the assessee under section 80C (External website that opens in a new window) of the act. Many new acts and laws are being introduced replacing the old laws and all related issues. Employee's Provident Fund Scheme.00 Secondary and Higher Education Cess Rs. which can be either law. Rebate is a reduction from income tax liability and not a deduction from income. Life Insurance Premium. education.Tax. there are a series of Tax laws and regulations in order to control the indirect taxation. transportation. energy. However. social services. made by the central government or even can be state specific laws. The residential property . 20. it should be remembered that such new laws while on one hand would create new opportunities. This deduction is termed as Tax Rebate.00 Wealth Tax Wealth Tax In India Wealth tax came into existence on 1st April 1957. imports. One can invest in various ways at the beginning of any financial year. Defense. and services are also included in this list. TAX REBATES After the income is computed as per the provisions of the Income Tax Act. Wealth tax is derived from the property owned by the proprietor. and Securities Transaction Tax.

that does not yield any income to its owner is also subjected to wealth tax.Wealth tax is termed as most significant direct tax. heir of the property is bound to pay the wealth tax of the property. If owner of property is deceased. wealth tax is applicable to the following: • • • • • • • An individual person A group of people who own a property A company or organization A Hindu undivided family (HUF) Person belongs to 1-by -6 categories A representative or heir of a dead person Non corporative tax payer The chargeability of a wealth tax in India for its residence or foreign citizens are different. Any person who is resident of India has to pay wealth tax under his/her name.com .tax4india. As per the wealth tax act. All assets and debts outside India are out of the scope ofWealth Tax Act. If a person owns a citizenship of a foreign country and he/she acquires a property in India as well as in foreign country. www. Under those circumstancesthe property owned by the owner in India is taxable where as property located outside India is exempted from the list.

Sign up to vote on this title
UsefulNot useful