Income Tax

In India, this tax was introduced for the first time in 1860, by Sir James Wilson in order to meet the losses sustained by the Government on account of the Military Mutiny of 1857 which is commonly known as Income Tax. Thereafter, several amendments were made in it from time to time. At last in 1886, a separate Income tax act was passed. This act remained in force up to, with various amendments from time to time. In 1918, a new income tax was passed and again it was replaced by another new act which was passed in 1922. This Act remained in force up to the assessment year 1961-62 with numerous amendments.

The Income Tax Act of 1922 had become very complicated on account of innumerable amendments. The Government of India therefore referred it to the law commission in1956 with a view to simplify and prevent the evasion of tax. The law commission submitted its report-in September 1958, but in the meantime the Government of India had appointed the Direct Taxes Administration Enquiry Committee submitted its report in 1956. In consultation with the Ministry of Law finally the Income Tax Act, 1961 was passed.

The Income Tax Act 1961 has been brought into force with 1 April 1962. It applies to the 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 Union Budget every year. Which also contains Finance Bill. After it is passed by both the houses of Parliament and receives the assent of the President of India, it becomes the Finance act. Besides this, amendments have also been made by various Amendment acts, for instance, Taxation laws Amendment Act, 1984, Direct Taxes Amendment Act,1987, Direct Taxes Law (Amendment) Acts of 1988 and 1989, Direct Tax Law (Second amendment) Act, 1992 and 1993, are mostly based on the recommendation of Chelliah Commiyye 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 drastically. It has therefor become very complicated both for the administering authorities and the tax-payers.

How Can We Help ?