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FLASHBACK: 11 income slabs existed forty years back, 97.75 percent was tax rate

Daily Bhaskar | Last Modified - Jul 12, 2014, 03:23 PM IST

In the year 1970-71, personal income tax was spread over 11 slabs. The lowest slab attracted 10 percent and the highest one 85 percent tax.
  • FLASHBACK: 11 income slabs existed forty years back, 97.75 percent was tax rate
    FLASHBACK: 11 income slabs existed forty years back, 97.75 percent was tax rate
    New Delhi: It was in the year 1860 that income tax was introduced for the first time in India. However, it was abolished in 1873, thirteen years later. Then again, in the year 1886, it became part of economy again.
    Tax rate was 97.75 percent in 1973-74
    In the year 1970-71, personal income tax was spread over 11 slabs. The lowest slab attracted 10 percent and the highest one 85 percent tax.
    Even if we add surcharge, the highest slab attracted 93.5 percent tax. In the year 1973-74, the people qualifying under the highest tax slab were imposed with 97.75 percent tax.
    Year 1985-86 provided maximum relief
    The fiscal year 1985-86 can be termed as the most relief providing year for the tax payers. This year tax slabs were reduced to four from eight earlier.
    Even the tax rate imposed on the tax payers from the highest slab was reduced to 50 percent from 66 percent in 1976-77.
    Era of three tax slabs
    Tax Reform Committee (TRC) advised the Indian government to reduce the tax slabs to three and hence, in the year 1992-93, the same was achieved. The tax slabs were: 20, 30 and 40 percent. In the year 1997-98 the slabs were changed to 10, 20 and 30 percent. The status quo has been maintained ever since.
    Image: Representational picture
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