Personal Income Taxation in India: Retrospect and Prospect (Report‪)‬

Abstract The increasing number of welfare policies and the political compulsion results in heavy public expenditure. To defray the public expenditure mobilising adequate revenue to the public authorities are indispensable. The most important sources of revenue are tax and non-tax revenues. Taxation is essential for better allocation of resources within the economy but also for promoting capital formation. In this paper, an attempt is made to analyse the personal income tax in retrospect and recent trends in the personal income taxation in India. In the taxation, bringing more people under income tax will comprehend income from different sources to the authorities. No doubt this will directly affects the income level, consumption, savings and investment level of the people. To put an end to the negative effects of the tax system a lot of exemptions, concessions, incentives etc, are given in the Income Acts. The tax structure of India should be sufficiently diversified. In our country, a large transfer of resources is not possible because of low per capita income, illiteracy, resistance, tax avoidance and tax evasion. Introduction of appropriate fiscal apparatus, upgrading of tax administration, educating people are essential to construct suitable tax structure to our country.