TAX SYSTEM IN INDIA

• The tax system in India allows for two types of taxes – Direct and Indirect Tax.
• Tax Collection Bodies: The three bodies which collect the taxes in India have clearly
defined the rules on what type of taxes they are permitted to collect.
– The Central Government
– The State Government
– Local Bodies
• POLITICAL MOVEMENT OF TAXATION OF INDIA
– In 1860 the Tax was introduced for the first time by Sir James Wilson.
– India’s First “Union Budget” Introduced by Pre-independence finance minister, James Wilson
on 7 April, 1860.
– A new income tax was passed. The Indian Income Tax Act of 1918,1922,1961 repealed the
Indian Income Tax Act of 1886 and introduced several important changes.
• DETAILS OF THE TAXES IN INDIA THAT ARE ADMINISTERED AT STATE
LEVEL
– Entertainment Tax
– Luxury tax
– Road Tax
– Stamp Duty
– Value Added Tax
Top-10 Highest Tax Paying States
• Here are the top ten highest tax-paying states in India and their direct tax revenues
to the union government for FY 2018-19.
Rank state Tax Contribution Number of
Taxpayers
1 Maharashtra Rs, 4.25 lakh crores 130.74 lakhs
2 Delhi Rs. 1.66 lakh crores 43.04 lakhs

3 Karnataka Rs. 1.20 lakh crores 51.47 lakhs

4 Tamil Nadu Rs. 74,238 crores 56.26 lakhs

5 Gujarat Rs. 49,021 crores 74.80 lakhs

6 West Bengal Rs. 44,638 crores 56.21 lakhs

7 Andhra pradesh Rs. 46,222 crores 38.34 lakhs

8 Haryana Rs. 29,881crores 29.72 lakhs

9 Uttar pradesh Rs. 27,687 crores 78.22 lakhs

10 Rajasthan Rs. 21,059crores 47.81 lakhs