India has come a long way since 1947, from 97.75% as the largest tax rate and 11 tax slabs, to 30% as the lowest rate and three plates.
Newly appointed Finance Minister Nirmala Sitharaman will on Friday present the first budget of the second term of the Narendra Modi government. It will also be the maiden budget for Sitharaman, who becomes the second woman finance minister after Indira Gandhi to do so in the history of independent India. Sitharaman will present the full-year budget for the year ending March 2020.
Below is the chronology of Income Tax since 1950s:
- In the 1950s, maximum income tax rate was decreased from 5 annas to 4 annas.
- In the 1960s, the lowest marginal revenue/income level decreased from 88.25% to 81.25% and gained revenue/income from 82.5% to 74.75%.
- Between 1973-74, eleven tax slabs were introduced, with rates from 10% to 85%. The maximum marginal rate is 97.75.
- In 1985-87, Minister of Finance V.P. Singh (1985-87) decreasef the amount of IT plates to four, reducing the top marginal IT rate to 50%.
- And in 1990-91, FM Manmohan Singh decreased IT plates to three (20, 30 and 40%) in five budgets between 1991-96.
- 1997-98: Although V.P. Singh and Manmohan Singh were the ones in their budget to cut the amount of plates, it was P. Chidambaram's presentation of the 'Dream Budget.' He substituted with 10, 20 and 30% the prevailing rates of 15, 30 and 40%.
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(With inputs from ANI)