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July 24th is a significant day for India, officially adopted as "Income Tax Day" or "Aaykar Diwas." This day holds great importance as it marks the commemoration of 150 years since the implementation of income tax in the country. The tax was first introduced by Sir James Wilson on July 24, 1860, during the British regime as a means to compensate for the losses incurred during the Revolt of 1857.
History of Income Tax Day
Over the years, income tax evolved without a formal structure for tax collection until 1922 when an official department was established to coordinate the process. The Income-tax Act of 1922 introduced various administrative bodies responsible for levy and collection. Subsequently, in 1939, the act was amended, leading to the separation of appellate and administrative functions and the introduction of a central charge in Mumbai (then Bombay).
Recognizing the historical significance of income tax and its enduring impact on the nation's financial system, the Finance Ministry declared July 24 as Income Tax Day in 2010. The day was chosen to honor the establishment of this essential levy, with the authority to levy income tax coming into force on July 24, 1860. The inaugural celebrations were led by former Finance Minister Pranab Mukherjee, making it an annual event thereafter.
Significance of Income Tax Day
Income Tax Day holds significant importance across the country. Regional tax offices conduct a range of activities to promote tax payment as a civic responsibility and emphasize its ethical significance. These outreach programs aim to educate the public, especially future taxpayers, about the importance of timely tax payment and its role in the country's progress.
The responsibility of collecting direct taxes for the Government of India lies with the Income Tax department, headquartered in New Delhi. Functioning under the Department of Revenue in the Ministry of Finance, the Income Tax department is overseen by the Central Board of Direct Taxes (CBDT). This statutory authority operates under the Central Board of Revenue Act, of 1963, and its officials also function as a Division of the Ministry dealing with matters related to direct tax levy and collection.
Celebrations of Income Tax Day
Income Tax is celebrated with great zeal and enthusiasm. Various events are organized to engage people of all ages and backgrounds. Activities like cyclotron and half marathon events are held to create awareness about tax compliance while promoting a healthy lifestyle. Tax literacy board games are distributed to children and young adults to instill financial awareness from an early age. Additionally, cultural programs and exhibitions of caricatures related to taxes are showcased to bring a creative and enjoyable dimension to the celebrations.
As responsible citizens, paying taxes on time is not just a legal obligation but a significant contribution to the nation's prosperity. The funds collected through income tax enable the government to undertake various developmental projects, provide essential services, and work toward the welfare of its citizens.
As India celebrates Aaykar Diwas each year, it serves as a reminder of the importance of income tax and its role in shaping the nation's progress. Through widespread education and outreach programs, the government endeavors to foster a culture of tax compliance, ensuring a stronger and more prosperous future for the country.
Written by Harshita Kumar
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