49-731: Central Revenue collections in 2007–08 Income tax in India is governed by Entry 82 of the Union List of the Seventh Schedule to the Constitution of India , empowering the central government to tax non-agricultural income; agricultural income is defined in Section 10(1) of the Income-tax Act, 1961 . Income-tax law consists of the 1961 act, Income Tax Rules 1962, Notifications and Circulars issued by
98-441: A clear six-stage model of the business cycle. In the first stage the economy is in equilibrium position. Investment is taking place and the capital stock is growing. In the second stage the growth in the capital stock leads to a downward shift in the investment curve as businessmen decide their factories become overfull. In the third stage (which overlaps with the second stage) the high growth in income causes higher saving which pushes
147-608: A first-class BSc (Econ.) degree in 1930. He subsequently became an assistant lecturer and, by 1938, lecturer and reader in economics at the LSE. Between 1943 and 1945, Kaldor worked for the National Institute of Economic and Social Research and in 1947 he resigned from the LSE to become Director of Research and Planning at the Economic Commission for Europe . He was elected to a Fellowship at King's College, Cambridge and offered
196-691: A four-percent health-and-education cess, are levied on the flat rate. Electronic filing is mandatory. Non-corporate taxpayers pay a 10-percent surcharge on income between ₹ 5 million and ₹ 10 million. There is a 15-percent surcharge on income over ₹ 10 million. Domestic companies pay seven percent on taxable income between ₹ 10 million and ₹ 100 million, and 12 percent on income over ₹ 100 million. Foreign companies pay two percent on income between ₹ 10 million and ₹ 100 million, and five percent on income over ₹ 100 million. There are four types of income-tax returns: Those responsible for registering or maintaining accounting books or other documents with
245-605: A function of sovereign states since ancient times. The earliest archaeological evidence of taxation in India is found in Ashoka 's pillar inscription at Lumbini . According to the inscription, tax relief was given to the people of Lumbini (who paid one-eighth of their income, instead of one-sixth). In the Manusmriti , Manu says that the king has the sovereign power to levy and collect tax according to Shastra : लोके च करादिग्रहणो शास्त्रनिष्ठः स्यात् । — Manu, Sloka 128, Manusmriti ("It
294-674: A lectureship in the Economics Faculty of the University in 1949. He became a Reader in Economics in 1952, and Professor in 1966. From 1964, Kaldor was an advisor to the Labour government of the UK and also advised several other countries, producing some of the earliest memoranda regarding the creation of value added tax . Inter alia, Kaldor was considered, with his fellow- Hungarian Thomas Balogh , one of
343-444: A lump sum. The schedule of advance tax payment for individual and corporate taxpayers are: There was no change in the timeline for tax payment; however, if the deposit of Advance Tax is delayed, a reduced interest rate of 9 percent per annum, or 0.75 percent per month, will be applicable instead of the current rate of 12 percent per annum, or 1 percent, for payment of all taxes falling between 20 March 2020 and 30 June 2020. Income tax
392-467: A one-time 45-percent tax. Declarations totaled 64,275, netting ₹ 652.5 billion (US$ 7.8 billion). The New Tax Regime was announced for individuals & HUF in Budget 2020 and became effective from financial year 2020-21. According to it, individuals can opt for reduced tax rates with no option for claiming exemptions & deductions. Currently, Indian taxpayers can choose between the old tax regime and
441-445: A recession or depression and so would dampen the cycle. Kaldor's model assumes wage and price flexibility. If wage and price flexibility are not forthcoming the economy may have a tendency to either perpetual and rising inflation or persistent stagnation. Kaldor also makes strong assumptions about how wages and prices respond in both inflations and depressions. If these assumptions do not hold Kaldor's model would lead us to conclude that
490-432: A record of any specified financial transaction must file an annual information return (Form No. 61A). Producers of a cinematographic film during the financial year must file a statement (Form No. 52A) within 30 days of the end of the financial year or within 30 days of the end of production, whichever is earlier. Non-residents with a liaison office in India must deliver Form No. 49A to the assessing officer within sixty days of
539-437: Is also paid by tax deduction at source (TDS): The tax rate is 25 percent for domestic companies. For new companies incorporated after 1 October 2019 and beginning production before 31 March 2023, the tax rate is 15 percent. Both rates apply only if a company claims no exemptions or concessions. For foreign companies, the tax rate is 40 percent (50 percent on royalties and technical services). Surcharges and cesses , including
SECTION 10
#1732844163181588-456: Is determined by exogenous investment and lagged income multiplied by the accelerator coefficient. Kaldor's model modified this to include a negative coefficient for the capital stock: I t = I a + w ( Y t − 1 − Y t − 2 ) − j K {\displaystyle I_{t}=I_{a}+w(Y_{t-1}-Y_{t-2})-jK} Kaldor then assumed that
637-439: Is from interest) who have not changed jobs are exempt from income tax. Although individual and HUF taxpayers must file their income-tax returns online, digital signatures are not required. The practice of paying taxes in advance rather than in a single sum at the end of the fiscal year is known as advance tax. These taxes, often known as the 'pay-as-you-earn' scheme, is paid on tax bills above ₹10,000 in installments instead of as
686-628: Is governed by the 1961 act, which has 298 sections and four schedules. The Direct Taxes Code Bill was sponsored in Parliament on 30 August 2010 by the finance minister to replace the Income Tax Act, 1961 and the Wealth Tax Act. The bill could not pass, however, and lapsed after revocation of the Wealth Tax Act in 2015. In its income declaration scheme, 2016 , the government of India allowed taxpayers to declare previously-undisclosed income and pay
735-416: Is in accordance with Sastra to collect taxes from citizens.") The Baudhayana sutras note that the king received one-sixth of the income from his subjects, in return for protection. According to Kautilya 's Arthashastra (a treatise on economics, the art of governance and foreign policy), artha is not only wealth; a government's power depended on the strength of its treasury: "From the treasury comes
784-566: Is part of the Ministry of Finance's Department of Revenue. Income tax is a key source of government funding. The Income Tax Department is the central government's largest revenue generator; total tax revenue increased from ₹ 1,392.26 billion (US$ 17 billion) in 1997–98 to ₹ 5,889.09 billion (US$ 71 billion) in 2007–08. In 2018–19, direct tax collections reported by the CBDT were about ₹ 11.17 lakh crore ( ₹11.17 trillion ). Taxation has been
833-585: The Central Board of Direct Taxes (CBDT), annual Finance Acts, and judicial pronouncements by the Supreme and high courts . The government taxes certain income of individuals, Hindu Undivided Families (HUF's), companies, firms, LLPs, associations, bodies, local authorities and any other juridical person . Personal tax depends on residential status. The CBDT administers the Income Tax Department , which
882-730: The Constitution of India on which Parliament has exclusive power to legislate. The legislative section is divided into three lists: the Union List, State List and Concurrent List . In India, residual powers remain with the Central Government . This makes the government of India similar to the Canadian federal government , and different from the governments of the United States , Switzerland , or Australia . There are 97 numbered items on
931-790: The Mutiny of 1857 , the British government faced an acute financial crisis. To fill the treasury, the first Income-tax Act was introduced in February 1860 by Sir James Wilson (British India's first finance minister). The act received the assent of the Viceroy on 24 July 1860, and came into effect immediately. It was divided into 21 parts, with 259 sections. Income was classified in four schedules: i) income from landed property; ii) income from professions and trade; iii) income from securities, annuities and dividends, and iv) income from salaries and pensions. Agricultural income
980-575: The Solow Growth Model in response to these perceived problems, summarised this view as such: Keep in mind that Harrod’s first Essay was published in 1939 and Domar’s first article in 1946. Growth theory, like much else in macroeconomics, was a product of the depression of the 1930s and of the war that finally ended it. So was I. Nevertheless it seemed to me that the story told by these models felt wrong. An expedition from Mars arriving on Earth having read this literature would have expected to find only
1029-535: The 1950s. He also went to India's Centre for Development Studies (CDS) in 1985 to inaugurate and deliver the first Joan Robinson Memorial Lecture. Owing to these links, the Kaldor family donated his entire personal collection to the CDS Library. There are 362 books in the collection and they cover a wide range of titles on economic theory, classical political economy, business cycles and history of economic thought. After
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#17328441631811078-708: The 1960s. The ignorance on the part of the American economists' knowledge of Kaldor's model also explains why the Cambridge Post-Keynesian economists found the ISLM model favoured by the American Neo-Keynesians to be crude and lacking. Kaldor was married to Clarissa Goldsmith, a prominent figure in Cambridge city life and a history graduate from Somerville College, Oxford . They had four daughters: Penny Milsom,
1127-453: The activities below is initially computed as business income, after permissible deductions. Thereafter, 40, 35 or 25 percent of the income is treated as business income and the rest is treated as agricultural income. These are permissible deductions according to the Finance Act, 2015: The due date for a return is: Individuals with an income of less than ₹500,000 (less than ₹10,000 of which
1176-489: The business cycle had an inherent mechanism built into it that redistributed income across the cycle and that these mitigated "explosive" results. As we have seen, in a cyclical upswing where planned investment begins to outstrip planned savings prices will tend to rise. Kaldor assumed that those who set prices have more power than those who set wages and so prices will tend to rise faster than wages. This means that profits must also rise faster than wages. Kaldor argued that due to
1225-528: The cycle might give way to either perpetual and rising inflation or stagnation. Kaldor's non-linear business cycle theory overcomes the difficulty that many economists had with Roy Harrod 's growth theory. Many of the American Neo-Keynesian economists thought that Harrod's work implied that capitalism would tend toward extremes of zero and infinite growth and that there were no dynamics that might keep it in check. Robert Solow , who eventually created
1274-412: The cycle the marginal propensity to invest shifts. The intuition behind this is that at the trough of the cycle there will be a large amount of excess capacity and so businessmen will not want to invest more, while at the peak of the cycle rising costs will discourage investment. This creates non-linear dynamics in the economy that then drive the business cycle. When Kaldor combines these components we get
1323-401: The cycle. It differed from these theories, however, as Kaldor introduced the capital stock as an important determinant of the trade cycle. This was in keeping with Keynes' sketch of the business cycle in his General Theory. Following Keynes, Kaldor argued that investment depended positively on income and negatively on the accumulated capital stock. The idea that investment depends positively on
1372-460: The debate, as monetarist policies where implemented by most central banks. He would, however, later be vindicated by empirical findings and policy, with money creation now being generally agreed to be mostly endogenous. In 1982, he published a book entitled The Scourge of Monetarism , deeply criticizing monetarist-inspired policies. Kaldor was invited by then Prime Minister of India— Jawaharlal Nehru —to design an expenditure tax system for India in
1421-400: The different savings propensities of capitalists and workers this will lead to higher savings. This will then dampen the cycle somewhat. In a recession or depression Kaldor argued that prices should fall faster than wages for the same reasons that Keynes laid out in his General Theory. This meant that income would be redistributed to workers as real wages rose. This would lead savings to fall in
1470-604: The end of the financial year. In the Finance Act, 2021, the government has introduced the following changes on the Income Tax Act, 1961: Self-assessment is done on a taxpayer's return . The department assesses tax under section 143(3) (scrutiny), 144 (best judgement), 147 (income escaping assessment) and 153A (search and seizure). Notices for such assessments are issued under sections 143(2), 148 and 153A, respectively. Time limits are prescribed in section 153. Penalties can be levied under §271(1)(c) for concealing or misrepresenting income. Penalties may range from 100 to 300 percent of
1519-479: The growth of income is simply the idea of the accelerator model that holds that in periods of high income growth and hence demand growth, investment should rise in the anticipation of high income and demand growth in the future. The intuition lying behind the negative relationship to the accumulation of the capital stock is due to the fact that if firms have a very large amount of productive capacity accumulated already they will not be as inclined to invest in more. Kaldor
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1568-517: The intellectual authors of the 1964–1970 Harold Wilson 's government's short-lived Selective Employment Tax (SET) designed to tax employment in service sectors while subsidising employment in manufacturing. In 1966, he became professor of economics at the University of Cambridge . On 9 July 1974, Kaldor was made a life peer as Baron Kaldor , of Newnham in the City of Cambridge . In 1969–1970, Kaldor
1617-414: The investment and savings functions are non-linear. He argued that at the peaks and troughs of the cycle the marginal propensity to save shifts in opposite ways. The intuition behind this is that during recessions people will cut their savings to maintain their standard of living while at high levels of income people will save a larger proportion of their income. He also argued that at the peaks and troughs of
1666-702: The key concept Circular Cumulative Causation , a multicausal approach where the core variables and their linkages are delineated. Káldor Miklós was born in Budapest , son of Gyula Káldor, lawyer and legal adviser to the German legation in Budapest, and Jamba, an accomplished linguist and "a well-educated, cultured woman". He was educated in Budapest, as well as in Berlin, and at the London School of Economics , where he graduated with
1715-475: The list. These are: Nicholas Kaldor Nicholas Kaldor, Baron Kaldor (12 May 1908 – 30 September 1986), born Káldor Miklós , was a Hungarian-born British economist. He developed the "compensation" criteria called Kaldor–Hicks efficiency for welfare comparisons (1939), derived the cobweb model , and argued for certain regularities observable in economic growth, which are called Kaldor's growth laws . Kaldor worked alongside Gunnar Myrdal to develop
1764-417: The model. But most people thought that this was a poor way of explaining the cycle as it relied on artificial, exogenous constraints. Kaldor, however, had actually invented a fully coherent and highly realistic account of the business cycle in 1940. He used non-linear dynamics to construct this theory. Kaldor's theory was similar to Samuelson's and Hicks' as it used a multiplier-accelerator model to understand
1813-410: The new tax regime. At the time of introduction, it had 7 different slabs. After three years from introduction, Indian Government reduced both the slab count & tax rates under New Tax Regime in Budget 2023, after reports of poor adoption to new tax regime by tax payers For the assessment year 2016–17, individuals earning up to ₹ 2.5 lakh (US$ 3,000) were exempt from income tax. About one percent of
1862-492: The population, the upper class , falls under the 30-percent slab. It increased by an average of 22 percent from 2000 to 2010, encompassing 580,000 income-tax payers. The middle class , who fall under the 10- and 20-percent slabs, grew by an average of seven percent annually to 2.78 million income-tax payers. According to section 10(1) of the Act, agricultural income is tax-exempt. Section 2(1A) defines agricultural income as: Income in
1911-415: The power of the government, and the earth, whose ornament is the treasury, is acquired by means of the treasury and army." Kalidasa 's Raghuvamsha , eulogizing King Dilipa, says: "it was only for the good of his subjects that he collected taxes from them just as the sun draws moisture from the earth to give it back a thousand time." British rule in India became established during the 19th century. After
1960-426: The publication of John Maynard Keynes ' General Theory , many attempts were made to build a business cycle model. The models that were built by American Neo-Keynesians such as Paul Samuelson proved unstable. They could not describe why an economy should cycle through recession and growth in a stable fashion. The British Neo-Keynesian John Hicks tried to improve the theory by imposing rigid ceilings and floors on
2009-711: The savings curve upwards. At this point the two curves become tangential and the equilibrium becomes unstable which generates a recession. In the fourth stage the same dynamics kick in but this time moving in the opposite direction. By the sixth stage the equilibrium is again unstable and a boom is produced. Kaldor also noted the importance of income distribution in his theory of the business cycle. He assumed that savings out of profits were higher than savings out of wages; that is, he argued that poorer people (workers) tend to save less than richer people (capitalists). Or: S w < S p {\displaystyle S_{w}<S_{p}} Kaldor believed that
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2058-427: The tax evaded. Under-reporting or misreporting income is penalized under §270A. Penalties are 50 percent of the tax on under-reported income and 200 percent of the tax on misreported income. Late fees are payable under §234F. Union List The Union List , also known as List-I , is a list of 97 numbered items (after 101st Constitutional amendment act 2016, entry 92 and 92c removed) given in Seventh Schedule in
2107-531: The time Solow was working on his growth theory, the Cambridge UK economists had already satisfactorily laid out a self-limiting theory of the business cycle that they thought was a reasonable description of the real world. This is one of the reasons that the Cambridge economists were so hostile in their reaction to Solow's growth model and went on to attack it in the Cambridge Capital Controversy of
2156-584: The wealth-tax Act 1957 , the Expenditure Tax Act, 1957 , and the Gift Tax Act, 1958 . The Direct Taxes Administration Enquiry Committee, under the chairmanship of Mahavir Tyagi , submitted its report on 30 November 1959 and its recommendations took shape in the Income-tax Act, 1961 . The act, which became effective on 1 April 1962, replaced the Indian Income Tax Act, 1922. Current income-tax law
2205-458: The wreckage of a capitalism that had shaken itself to pieces long ago. Economic history was indeed a record of fluctuations as well as of growth, but most business cycles seemed to be self-limiting. Sustained, though disturbed, growth was not a rarity. In fact, Kaldor's 1940 paper had already shown this to be completely untrue. Solow was working with an erroneous and underdeveloped theory of the business cycle that he had taken over from Samuelson. By
2254-472: Was in effect integrating Roy Harrod 's ideas about unbalanced growth into his theory. In the standard accelerator model that stood behind Samuelson's and Hicks' business cycle theories investment was determined as such: I t = I a + w ( Y t − 1 − Y t − 2 ) {\displaystyle I_{t}=I_{a}+w(Y_{t-1}-Y_{t-2})} This states that investment
2303-641: Was involved in a fierce debate with the so-called U.S. monetarist economist Milton Friedman . While Friedman defended the exogenous money supply theory, according to which money is created by powerful central banks , Kaldor and Post-Keynesian economists claimed that money is created by second-tier banks through the distribution of credits to households and companies . In the Post-Keynesian framework, central banks only refinance second-tier banks on demand, but they are unable to properly create money. Despite insightful contributions, Kaldor could not initially win
2352-558: Was passed in 1939. The 1922 act was amended twenty-nine times between 1939 and 1956. A tax on capital gains was imposed in 1946, and the concept of capital gains has been amended a number of times. In 1956, Nicholas Kaldor was appointed to investigate the Indian tax system in light of the Second Five-Year Plan's revenue requirement. He submitted an extensive report for a coordinated tax system, and several taxation acts were enacted:
2401-487: Was taxable. A number of laws were enacted to streamline the income-tax laws; the Super-Rich Tax and a new Income-tax Act were passed in 1918. The Act of 1922 significantly changed the Act of 1918 by shifting income-tax administration from the provincial to the central government. Another notable feature of the act was that the rules would be outlined by annual Finance Acts instead of the act itself. A new Income-tax Act
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