courtesy : tax latest
Information
Taxes in India are levied by the Central Government and the State Governments by virtue of powers conferred to them from the Constitution of India.] Some minor taxes are also levied by the local authorities such as the Municipality.
The authority to levy a tax is derived from the Constitution of India which allocates the power to levy various taxes between the Union Government and the State Governments. An important restriction on this power is Article 265 of the Constitution which states that “No tax shall be levied or collected except by the authority of law”. Therefore, each tax levied or collected has to be backed by an accompanying law, passed either by the Parliament or the State Legislature. Nonetheless, tax evasion is a massive problem in India, ultimately catalyzing various negative effects on the country. In 2019–20, the Direct tax collections reported by CBDT were approximately INR 12.33 trillion.
History
India has abolished multiple taxes with passage of time and imposed new ones. A few of these taxes include inheritance tax,] interest tax, gift tax, wealth tax, etc. Wealth Tax Act, 1957 was repealed in the year 2015.] Direct Taxes in India were governed by two major legislations, Income Tax Act, 1961 and Wealth Tax Act, 1957. A new legislation, Direct Taxes Code (DTC), was proposed to replace the two acts.[when?][7] However, the Wealth Tax Act was repealed in 2015 and the idea of DTC was dropped.
