February 20, 2020
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Time Line

Time Line

1789: Income Tax
introduced by William Pitt to finance the war with Napoleon.

1802: The end of Napoleonic wars. Income Tax repealed.

1803: It returns, this time to stay.

1874: Both prime ministerial candidates William Gladstone and Benjamin Disraeli promise its repeal. Gladstone becomes PM, but tax stays. Income tax is still a "temporary tax" in Britain, expiring on 5 April every year, with Parliament having to reapply it through an annual Finance Act.


1861: Income tax imposed by Abraham Lincoln. 3% on incomes of $600 and above to fund the civil war effort.

1872: It is rescinded by president Ulysses Grant.

1894: Income Tax reappears.

1895: US supreme court declares Income Tax unconstitutional on the ground that it wasn’t apportioned properly among the states.

1973: It returns for good through the 16th amendment to the constitution that said "Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration". It is still not known whether all states had ratified that amendment.


1860: Income Tax introduced for five years by James Wilson, India’s first fInance member (also founder of The Economist magazine and Standard Chartered Bank). Reason: rise in public debt after the 1857 mutiny.

1886: An act defines agricultural income and exempts it from IT. The exemption is still valid.

1918: All tax laws are recast. Income from all sources are aggregated, to fix rate of tax.

1922: The Indian Income Tax Act transfers the administration of the tax to the central government, changes assessment to income of the previous year and allows the rates to be announced by the Finance Acts.

1961: The present Income tax Act, a simpler version of the 1922 Act, is passed.

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