Tax History

Some materials relevant to the history of income tax are collected on this page.

In the 1920s, the Calcutta High Court summarised the various enactments pertaining to Income Tax from 1860 to 1922 (King-Emperor v Rajah Probhat Chandra Baruah) thus:

The Income-tax Act of 1860, which was for a period of five years only and which imposed a 3 per cent, tax made no distinction between agricultural income and non-agricultural income and it included income derived from land in India wherever situate. Such income was taxed directly. The Act of 1860, as I have said, ceased to operate in 1865. In 1867 it was again brought into operation and this time the Act excluded agricultural income. In 1869 what was known as the Certificate Tax Act was converted into a general Income-tax Act and it included agricultural income. Thereafter it appears that for some time there was no tax on incomes. In 1872 an Act was passed for imposing duties on incomes arising from offices, properties, professions and trades, to be in force for one year only. Section 21 of this Act is important. By that section it was provided that owners of lands or houses occupying the same should be chargeable in respect of the annual value thereof at 9/10ths of the full rent at which such lands or houses were worth to be let for the year. It was further provided that the local Governments may with the sanction of the Governor General in Council prescribe for the whole or any part of the territories, subject to such local Government special rules for the assessment of income derived from land at an amount bearing a fixed proportion to the revenue assessed thereon. Then came in 1886 the Income-tax Act of that year and taxes on income were made permanent. The Act of 1886 (the legislature bearing no doubt in mind the fact that land from which agricultural income was derived was already subject to the payment of cesses under Act 10 of 1871) excluded agricultural income. It was described as an Act for imposing a tax on income derived from sources other than agriculture. It dealt with the question of land by way of exemption in Section 5, but subject to the exemptions prescribed in that Act, income from land wherever situate was assessed to income tax. Then followed the Act of 1918 and this with a slight alteration was followed by the present Act of 1922.

The Gokhale Institute of Politics and Economics has made several pieces of scholarship on the history of Indian income tax law available freely, including the following:

  • V. Rao, Taxation of India in India (1931) is available here
  • J.P. Niyogi, The Evolution of the Indian Income Tax (1929) can be accessed from this link
  • S.M. Pagar, The Indian Income Tax: Its History, Theory and Practice (1920) is available here.

Some other resources:

These are all materials focussed on India: I hope to add materials for other common law jurisdictions as well. A great resource – sadly, not free – is Prof. Peter Harris’s Income Tax in Common Law Jurisdictions.