Income tax originated nearly 2000 years ago according to a biblical reference where all the world was ordered to be taxed. Ancient systems of taxation existed in Egypt, Persia, and India dating back as far as 3000 BC. In India, the Manu Smriti and Arthashastra texts outlined various land taxes, import/export duties, and other levies during ancient times. James Wilson is credited with introducing the first modern Income Tax Act in India in 1860 to help meet expenses from the freedom movement. The current Income Tax Act of 1961 consolidated previous acts and has been amended annually since.

1. INCOME TAX-
HISTORICAL BACKGROUND
P R E PAR ED BY : C A A N N I E S T E P H EN

2. WHAT IS TAX
• The word 'tax' first appeared in the English language
only in the 14th century.
• It is derived from the Latin word ”taxare” which
means 'to assess‘
• It is also derived from the word ‘taxo’ which means
estimate

3. LAY MAN’S PERSPECTIVE
It is also termed as
• LEVY
• CHARGE
• PAYMENT TO THE GOVERNMENT
• IMPOSITION
• EXCISE
• TOLL

4. DEFINITION
• MERRIAM WEBSTER : : a charge, usually of money imposed by
authority, on persons or property for public purposes
• CAMBRIDGE: (an amount of) money paid to the government
that is based on your income or the cost of goods or services
you have bought.

5. ORIGIN OF
TAX
• Originated nearly 2000- years ago
• Luke 2:1 reads: “And it came to pass in those days,
that there went out a decree from Caesar
that all the world should be taxed.”
• It is estimated to have been declared after Census of
Quirines ( stated that every person has to be
registered) in the year 6 CE.

6. EARLIER THE MOTIVE OF TAX WAS
Preparation for wars
Payment of salaries
Administration of provinces
Maintenance of reserves in royal treasury

7. WHY TAX NOW
INFRASTRUCTURAL DEVELOPMENT
EDUCATION
HEALTH
ERADICATING POVERTY
FUND WARS
SALARY TO GOVERNMENT WORKERS
PREPAREDNESS FOR NATURAL CALAMITIES

8. F L I P P I N G T H R O U G H T H E
PA G E S O F H I S T O R Y…
THE GENESIS

9. THE HISTORY OF TAX DATES BACK
TO…
• The first known system of taxation was in
Ancient Egypt in the years 3000-2800 BC in
the First Dynasty of Egypt of the Old
Kingdom of Egypt.
• It was classified into two types – Corvee and
Tithe
• Corvee is a form of unpaid labour,
intermittent of nature and which lasts for a
limited period of time ie. For a certain
number of days in a year
• Tithe is one tenth of something which is
generally paid to any religious organization

10. THE TREND PASSED ON TO THE
PERSIANS
• A regulated and a sustainable tax system
was introduced by Darius I the Great in
Persian Empire in 500 BC
• The system of taxation was specially
designed by the different Satray or
provincial governor at their own
discretion.
• There would be around 20-30 Satrays in
the empire and they would decide the
amount of tax to be paid based on the

11. ZAKAT AND JIZYA
• Islamic rulers imposed these two types of taxes- Zakat and Jizya
• Zakat is the form of alms giving treated as religious obligations or
tax which in Islamic ranking is next after prayer in importance
• Jizya is the per capita yearly taxation historically levied in the form
of financial charge on non resident muslim subjects of a state
governed by Islamic law in order to fund public expenditure
instead of Zakat paid by the resident Muslims.

12. C A E S A R AU G U S T U S
Around 6 CE
Stated that the
whole world
should be taxed.

13. BIBLE REFERENCE
(BOOK OF ST LUKE CHAPTER 2:1)

14. HISTORY OF TAXES IN INDIA
In India, the system of
direct taxation as it is
known today has been
in force in one form or
another even from
ancient times.

15. MANU SMRITI & ARTHASHASTRA
• Manu, the law giver laid down that
traders and artisans should pay
1/5th of profits in silver and gold
• Agriculturists were to pay
1/6th,1/8th or 1/10th of their
produce depending on their
circumstances
• War loans were raised during
emergencies

16. WHAT ARTHSHASTRA HAD TO SAY
 Arthashastra mentioned that each tax
was specific and there was no scope for
arbitration.
• The land revenue was fixed at 1/6 share
of the produce
• Import and export duties were
determined on ad-valorem basis.
• The import duties on foreign goods were
roughly 20% of their value.
• Similarly, tolls, road cess, ferry charges
and other levies were all fixed

17. VARTHANAM AND DVARODAYA
LEVY COLLECTED
ON ALL IMPORTS
OF FOREIGN
GOODS

18. YATRAVETANA
LEVIED ON
PILGRIMS

19. VANIKPATH
INCOME FROM
ROADS AND
TRAFFIC PAID
AS POLLS

20. RELIGIOUS TAX- BALI

21. TAX IN CASH- KARA

22. LAND TAX- SITA

23. OTHER FORMS OF TAX IN ANCIENT
INDIA
• CONSTRUCTION TAX (VĀSTUKA)
• SURVEY TAX (RAJJU)
• POLICE TAX (CHORARAJJU)
• TAX ON VILLAGES ON THE WATER (KLŖPTA)
• GENERAL TAX ON VILLAGES (PIŅDAKARA)
• EMERGENCY TAX (PRAŅAYA)
• CELEBRATION TAX (UTSANGA)
• WAR TAX (SENĀBHAKTA)

24. TYPES OF TAX

25. DIRECT TAX
•The impact and incidence is on the
same persons
•Examples: Income Tax

26. INDIRECT TAX
• The impact and incidence is on different persons.
• Example- GST

27. DIFFERENCES
CONTEXT DIRECT TAX INDIRECT TAX
Imposition
Imposed on income or
profits
Imposed on goods and services
Taxpayer
Individuals, HUFs, firms
and companies
End-consumer of the goods and
services
Applicability
Applicable to the
taxpayer alone
Applicable to every stage of the
production-distribution chain
Tax burden
The burden falls directly
on the individual
The burden is shifted to the
consumer by the manufacturer o
service provider

28. WHAT IS INCOME TAX
• Income tax refers to annual taxes levied by the
federal government and most state governments on
individual and business income.

29. INCOME TAX COINED
• Income Tax was introduced
by James Wilson in 1860, as the
then Finance Member of the India
Council that advised the
Viceroy of India.
• He introduced the Income Tax
Act,1860 also gave India's first
Budget Speech.
• It was introduced to meet the
expenses and losses suffered due
to the first Freedom Movement in

30. • In 1918, a new income tax was passed and again it was replaced by
another new act which was passed in 1922.
• 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 are made in the Income Tax Act by the
Union Budget every year.

31. REFERENCES
• https://trendaap.com/product/old-currency-india/
• https://www.merriam-webster.com/thesaurus/taxes
• https://dictionary.cambridge.org/dictionary/english/tax
• https://www.britannica.com/topic/taxation/History-of-taxation
• https://www.jagranjosh.com/general-knowledge/history-of-taxation-in-india-
1481028305-1
• https://en.wikipedia.org/wiki/Census_of_Quirinius
• https://www.keepbelieving.com/caesar-a-tax-plan-that-changed-the-world/
• https://www.indiamart.com/proddetail/indirect-tax-planning-services-
21847859991.html