Income Tax Day, observed on July 24, honours the establishment of income tax by Sir James Wilson in 1860, a significant turning point in India’s fiscal history. This first tax was intended to tax income from different sources, as stated in the Income Tax Act’s Section 2(24).
The nation’s tax system was genuinely revolutionised by the Income-tax Act of 1922, despite the fact that the 1860 implementation laid the foundation. This extensive Act created a methodical administrative framework that still serves as the foundation for modern tax administration in India, in addition to formalising the organisation of income tax authorities.
Key Milestones in the Indian Income Tax System
Year 1860: Introduction of Income Tax by Sir James Wilson
Year 1922: Comprehensive Income-tax Act established
Year 1924: The Central Board of Revenue Act constituted
Year 1946: Recruitment of Group A officers
Year 1957: IRS (Direct Taxes) Staff College started, later renamed National Academy of Direct Taxes
Year 1981: Initiation of computerization in the Income-tax Department
Year 2009: Establishment of a Centralised Processing Centre (CPC) in Bengaluru
Year 2014: Launch of the new national website of the Income Tax Department
Year 2020: Introduction of the “Vivad se Vishwas” scheme to reduce litigation and generate government revenues
Year 2021: Launch of the new e-filing portal
As per a release by the government of India In 1924, the Central Board of Revenue Act further strengthened this structure by constituting the Board as a statutory body responsible for administering the Income-tax Act. This period saw the appointment of Commissioners of Income Tax for each province, supported by Assistant Commissioners and Income Tax Officers.
The recruitment of Group A officers in 1946 marked another significant development, with initial training conducted in Bombay and Calcutta. The establishment of the IRS (Direct Taxes) Staff College in Nagpur in 1957, later renamed the National Academy of Direct Taxes, further strengthened professional development within the department.
Technological advancements also played a crucial role, with the introduction of computerization in 1981. This initial phase focused on processing challans electronically. Finally, in 2009, the Centralised Processing Centre (CPC) was set up in Bengaluru to handle the bulk processing of e-filed and paper returns, operating efficiently in a jurisdiction-free manner.
Income Tax Day not only honours the historical development of tax administration in India but also highlights the continuous advancements and modernization efforts aimed at creating a more efficient and taxpayer-friendly system.
