INCOME TAX DAY 2022: The Income Tax Day or Aaykar Diwas was introduced in 2010 to commemorate 150 years of this tax in India. The day is celebrated with several outreach programmed and events to promote the payment of taxes and educate potential taxpayers that payment of taxes is the duty of citizens. By paying our taxes on time, we can contribute to the country’s progress.
The provision of Income Tax was introduced in India on July 24, 1860, by James Wilson to compensate for the losses incurred by the British regime during World War I. The practice continued for years before a formal structure or department was introduced for managing tax collection, in 1922. The Income-tax Act of 1922 introduced a specific nomenclature to various Income-tax authorities.
Amendments to the act in 1939 introduced two key structural changes – appellate functions were separated from administrative functions, and a central charge was created in Mumbai (then Bombay).
Income Tax collection is one of the critical components of government earning, or sourcing of funds for carrying out various development works across the country. Over the years, the system of income tax collection has gone through many changes depending on the requirement of the country.
Income Tax is levied on taxpayers based on a slab system- this means there’s a different tax rate for people with different income ranges.
In the Union Budget presented for this year, the government also introduced a new tax structure. The new tax regime, which was introduced as an optional measure for taxpayers, proposes lower tax rates on various tax slabs. To opt for the new tax structure, taxpayers must let go of the deduction applicable in the older tax regime. Taxpayers can also choose to continue to pay tax under the existing tax laws while claiming any exemptions that apply to them.
Under the new tax regime, any annual income lower than Rs 2.5 one hundred thousand is tax-free whereas in the old regime the exemption applied to yearly earnings up to Rs 2.25 one hundred thousand.
Notably, in the Union Budget 2019, the Centre proposed the introduction of a scheme of faceless e-assessment to eliminate the interface between the assessing officer and the assesses during the course of proceedings to the extent possible.
“The taxpayer has been at the centre of the department’s reform agenda. Over the years, the department has taken several significant measures to reform itself into a progressive and efficient organization with a taxpayer-centric focus,” he added.
Citing the dividends reaped from such an approach, he said that during 2021-22 the department recorded the highest ever direct tax collections in the country at 14.09 lakh crores, which accounted for 52 per cent of the total collections by the central government.
The number of taxpayers filing tax returns stood at 7.14 crore by March 2022.
Speaking about the reforms on simplification, rationalization, and digitization of taxes, he said: “Concerted efforts have been made in the last eight years in the area of digitization tax compliance, instant PAN, PAN-Aadhar linking, the new e-filing portal…use of artificial intelligence and analytics in risk management and scrutiny selection.”
Further, he said tax relief was provided to individual taxpayers for Covid-19-related medical treatment for himself/herself or family member for amounts received from the employer for from any person, and besides on ex-gratia received by family members on Covid-led death.
In his concluding remarks, he requested all taxpayers to join hands on the occasion of India’s 75th year of Independence and renew their pledges and reaffirm promises toward an AtmaNirbhar Bharat.
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