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When did India's 1st I-T Act came into being?
July 05, 2004
TAXATION
When did India's 1st I-T Act come into being? It's the dreaded time to file tax returns. The salaried class has till the end of July to file tax returns. Experts feel taxpayers must wait till the Budget announcements before filing their returns. Take the Rediff Business Quiz and find out how much you know about taxation in India.
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1. When did India's 1st I-T Act come into being? a) 1860 b) 1910 c) 1922
Wrong! Try again.
Wrong! The correct answer is 1860. The history of Income Tax in India dates back to 1860 when the first Income Tax Act was introduced by James Wilson, who later became (British) India's first finance member. This Act lapsed in 1865. Thereafter Act-II of 1886 was the next landmark. The Indian Income Tax Act, 1922 -- which came into being as a result of the recommendations of the All India Income Tax Committee -- is a milestone in the evolution of direct tax laws in India. The Act of 1922 remained in force till 1961. Meanwhile, in 1956 the government had referred the Act to the Law Commission to recast it. The Income Tax Bill giving effect to its recommendations was submitted in the Lok Sabha in April, 1961. The Bill received the assent of the President on September 13, 1961.
Correct! The history of Income Tax in India dates back to 1860 when the first Income Tax Act was introduced by James Wilson, who later became (British) India's first finance member. This Act lapsed in 1865. Thereafter Act-II of 1886 was the next landmark. The Indian Income Tax Act, 1922 -- which came into being as a result of the recommendations of the All India Income Tax Committee -- is a milestone in the evolution of direct tax laws in India. The Act of 1922 remained in force till 1961. Meanwhile, in 1956 the government had referred the Act to the Law Commission to recast it. The Income Tax Bill giving effect to its recommendations was submitted in the Lok Sabha in April, 1961. The Bill received the assent of the President on September 13, 1961.
2. According to the latest data Income-Tax collection has: a) Dropped b) Grown c) Remained steady
Wrong! Try again..
Wrong! The correct answer is grown. I-T collection grew 45 per cent in May 2004 making up for the negative growth recorded by Centre's corporate tax receipts till the end of May. Latest tax figures for the first two months of the current fiscal show that personal Income-Tax collection has touched Rs 5,442.92 crore, which is 45.23 per cent more than the figure recorded in May 2003-04 (Rs 3,747.75 crore). The figures of tax collections for this period have become crucial as Finance Minister P Chidambaram is due to present his General Budget based on these estimates.
Correct! I-T collection grew 45 per cent in May 2004 making up for the negative growth recorded by Centre's corporate tax receipts till the end of May. Latest tax figures for the first two months of the current fiscal show that personal Income-Tax collection has touched Rs 5,442.92 crore, which is 45.23 per cent more than the figure recorded in May 2003-04 (Rs 3,747.75 crore). The figures of tax collections for this period have become crucial as Finance Minister P Chidambaram is due to present his General Budget based on these estimates.
3. What is regarded as the first authoritative text on public finances? a) Manu Smriti b) Arthasastra c) Raghuvansh
Wrong! Try again..
Wrong! The correct answer is Arthasastra. Kautilya's Arthasastra was the first authoritative text on public finance, administration and the fiscal laws in India. It is remarkable that the present day tax system is in many ways similar to the system of taxation in vogue about 2,300 years ago. According to Kautilya, the power of the government depended upon the strength of its treasury.
Correct! Kautilya's Arthasastra was the first authoritative text on public finance, administration and the fiscal laws in India. It is remarkable that the present day tax system is in many ways similar to the system of taxation in vogue about 2,300 years ago. According to Kautilya, the power of the government depended upon the strength of its treasury.
4. What is the full form of CBDT? a) Cash Before Delivery and Taxation b) Company Board of Direct Taxes c) Central Board of Direct Taxes
Wrong! Try again..
Wrong! The correct answer is Central Board of Direct Taxes. The Central Board of Direct Taxes, the apex body of the Income Tax Department, is manned by the officers of the Indian Revenue Service. It functions as a part of the finance ministry of the Government of India. It performs various statutory functions. It has the power to assign jurisdiction to the authorities below and to issue orders, instructions and directions to them for the administration of the tax laws. It also enjoys certain powers of delegated legislation and is competent to make rules for carrying out the implementation of the direct tax laws. The CBDT has a chairman and six members.
Correct! The Central Board of Direct Taxes, the apex body of the Income Tax Department, is manned by the officers of the Indian Revenue Service. It functions as a part of the finance ministry of the Government of India. It performs various statutory functions. It has the power to assign jurisdiction to the authorities below and to issue orders, instructions and directions to them for the administration of the tax laws. It also enjoys certain powers of delegated legislation and is competent to make rules for carrying out the implementation of the direct tax laws. The CBDT has a chairman and six members.
5. What does the term tax avoidance mean? a) Legal minimisation of the impact of taxation b) Illegal attempt to escape the impact of taxes c) Investment to acquire something of value with the expectation that it defer taxes
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Wrong! The correct answer is: Legal minimisation of the impact of taxation. Tax avoidance may not always succeed, but is legal. Tax evasion is illegal and criminal penalties apply, hence, if caught evading tax the person will be fined and even imprisoned.
Correct! Tax avoidance may not always succeed, but is legal. Tax evasion is illegal and criminal penalties apply, hence, if caught evading tax the person will be fined and even imprisoned.