A Walk Through Income Tax

History of Income Tax

The tax was introduced for the first time in India in 1860 by Sir

James Wilson in order to cover up losses sustained by the

government due to mutiny of 1857. There were many amendments

from time to time, at last a separate Income Tax Act was passed

in 1886. This Income Tax Act was replaced by Income Tax Act,

1918, which was further replaced by Income Tax Act 1922.

Income Tax Act of 1922 was subject to many amendments

over a period of time due to which it became very complicated.

Therefore in order to simplify and to plug loopholes the government

of India referred the matter to law commission in 1956, which

submitted its report in September, 1958. But in the meantime the

government of India constituted Direct Tax Inquiry Committee

which submitted its report in 1959. Finally in consultation with

ministry of law the Income Tax Act, 1961 was enacted which

applied to whole of India.

Income Tax Act, 1961 has also been subject to many

amendments over a period of time either through Finance Act as

passed by the Parliament every year or by separate amendment

Acts. Till now following important amendment acts have been

passed:

Taxation Laws Amendment Act, 1984

Direct Taxes Amendment Act, 1987

Direct Taxes Law (Amendment) Act, 1989

Direct Taxes Law (Second Amendment) Act, 1989

Taxation Law Amendment Act, 1991