Timeline of Taxation in India

1922: The Income Tax Department was established in the year 1922. The Income Tax Act, 1922 gave a particular classification to different income tax authorities.

1924: The Central Board of Revenue Act established the Board as a legislative body with operational duties for the operation of the Income-tax Act. Each province had its own appointed Commissioners and Assistant Commissioners.

1939: The amendments to the Income Tax Act, in 1939, made two important changes in its structure:

(i) Appellate functions were separated from inspecting functions.

(ii) A class of officers known as Additional Assistant Commissioners came into existence and a central office was established in Bombay.

1940: Directorate of Inspection (Income Tax) came into being.

Excess profits tax introduced with effect from September 1st, 1939.

1941: Income-tax Appellate Tribunal came into existence and central charge was created at Calcutta.

1943: Special investigation branches were set up.

1946: A few officers of class-I were directly recruited. Demonetisation of high denomination notes was made. Excess Profit Tax Act was repealed.

1947: Business Profit Tax enacted for the period April 1st, 1946 to March 31st, 1949).

1951: Vardhachari Commission Report of Income-tax Investigation Commission was received. Voluntary Disclosure Scheme was initiated.

1952: Estate Duty Act, 1953 was passed on October 15th, 1953.

1954: Internal Audit Scheme in the Income-Tax Department was initiated.

1957: The Wealth Tax Act was passed in 1957.

1958: The Gift Tax Act, 1958 was passed and the Report of Law Commission tabled.

1959: The Direct Taxes Administration Enquiry Committee submitted its report.

1960: The post of the Directorate of Inspection (Research, Statistics & Publications) was created and the two grades of Inspection—selection and ordinary grades—were amalgamated into a single entity.

1961: Direct Taxes Advisory Committee set up the Direct Taxes Administration Enquiry Committee. Income Tax Act, 1961 was enacted and Revenue Audit started in the Ministry. An internal assessment of jobs completed by Income-Tax officers was commenced.

1963: Central Board of Revenue was divided into two parts and the Central Board of Direct Taxes (CBDT) was established as a consequence of the Board of Revenue Act, 1963.

1964: The Chairman, CBDT was assigned its post.

1965: Voluntary Disclosure Scheme became functional.

1966: Functional Scheme was started with the creation of a Special Recovery Unit. The same year an Intelligence Wing was set up with the Director Inspection (Investigation) as its Head.

1968: A Valuation Cell was established. Bhoothalingam Committee presented its report and the Administrative Reforms Commission was constituted.

1969: Class-II Income Tax Officers were recruited directly.

1970: ‘Additional Commissioner of Income tax’ post came into existence.

1971: ‘Tax Recovery Commissioners’ were recruited as a part of a new service.

1972: A Special Cell was set up within the scope of the Directorate of Inspection (Investigation) whose duty was to investigate large businesses. The same year, the Directorate of Organisation and Management Services (Income tax) was constituted and the post of ITO (Internal Audit) was created. The PAN system was initiated and legal authority was imparted to the Valuation Officers under the Income-Tax and Wealth Tax Act, 1957.

1974: Compulsory Deposit Scheme was initiated and the technique of Management by Objectives was implemented.

1975: Implementation of Voluntary Disclosure Scheme was done. Also in the same year, a special cell was set up to deal with the cases of smuggling.

1976: Settlement Commission was initiated. Departmentalisation of accounts was begun. Chokshi Committee submitted its interim report.

1977: A new service, The Inspecting Assistant Commissioner (IAC Assessment) was commenced.

1978: The post of Commissioner (Appeals) was created to oversee the cases of appeals in nature. The same year, the Directorate of Inspection (Recovery) was established and Chokshi Committee submitted its final report.

1979: The Directorate of Inspection (Public Relations) was established.

1980: Hotel Receipt Tax Act, 1980 was enacted.

1981: Many reforms happened in 1981 like constituting of the Economic Administrative Reforms Commission, Directorates of Inspection-Intelligence, Survey and of Inspection. Special Bearer Bonds (Immunities and Exemptions) Act was passed by the Legislature.

1982: Directorate of Inspection Investigation (Special Investigation) was established.

1983: The vigilance structure was strengthened. The procedure for challans and PAN were computerised.

1984: Taxation Laws (Amendment) Act, 1984 was legislated.

1985: The post of Director General (Investigation) was made. Various other schemes were started like the Compulsory Deposit Scheme (Income Tax Payers) Act, 1974, revoking of Interest Act, Reward Scheme, etc.

1987: L.K. Jha Committee was constituted. The office of Directorate General (Tax Exemption) was established at Kolkata and the Direct Tax Law (Amendment) Act, 1987 initiated a uniform fiscal year.

1988: Benami Transactions Prohibition Act, 1988 was passed.

1989: DGIT (Management System) was constituted.

1990: Gift Tax Bill was initiated and 65 posts of Deputy Commissioner of Income Tax and the same number of posts of Assistant Commissioner of Income Tax were created.

1991: Interest Tax Act, 1974 was repealed.

1992: The post of Director General of Income tax (Management System) was done
away with.

1997: Income tax rates were decreased. Minimum alternate tax was initiated.

1998: Direct Appeals, Section 260 A, was initiated by the High Court to have wider base of tax. Gift tax was abolished the same year along with some new schemes.

1999: It was made compulsory to give bank and credit card details. Samman Scheme was put into place the same year.

2000: The Department was reconstructed to improve efficiency. Interest tax Act was abolished in 2000 itself.

2001: Various new posts were made in the Department.

2002: Computerised processing of returns in India was initiated all over the country. Kelkar Committee Report was introduced, which inter alia, recommended:

(i) Outsourcing on non-core functions of the department, and

(ii) Reduction in exemptions, deductions, reliefs, rebates etc.