History of taxes before 1922

The ancient Indian taxation system is praised in K.B. Sarkar's book as being a model for modern countries "According to the 1978 Edition of Public Finance in Ancient India, "Most of the Ancient Indian levies were quite productive. Although direct tax received more attention, the combination of direct and indirect taxes allowed for greater flexibility in the tax system. Most individuals fell within the umbrella of the tax system, which had a wide basis. The taxes vary, and the wide range of levies represented the lifestyle of a sizable and diverse people".

However, Kautilya's Arthasastra is the work that most thoroughly and methodically discusses the taxation system. This well-known work on statecraft, which was written about 300 B.C., when the Mauryan Empire was on its magnificent ascent, is absolutely extraordinary since it provides detailed insights into that era's culture and offers advice on how a monarch should govern the country to maximise efficiency and success.

Here is fabulous information on 80g limit.

Kautilya devotes a significant amount of Arthasastra to topics relating to money, especially managing money. A well-known statesman said that the Mauryan system, insofar as it related to agriculture, was a kind of state landlordism and that the collecting of land revenue was a significant source of income for the State. The State imposed water rates, octroi charges, tolls, and customs duties in addition to the customary one-sixth share of agricultural production that it normally collected.

In addition to the extraction of metals and other commodities, taxes were also collected on forest products. A significant source of income that was collected at the location of salt mining was the salt tax.

The trade and commerce that took place with other nations, as well as the aggressive efforts of the Mauryan Empire to advance this trade, were thoroughly recorded by Kautilya. Chinese, Ceylonese, and other goods were brought into the kingdom, and a tax known as a vartanam was levied on all imported foreign goods. For the import of foreign products, there was an additional tax known as Dvarodaya that the concerned trader had to pay. Ferry fees of all types were also charged to increase tax revenue.

A significant portion of the State's revenue came from the well-organized collection of income tax. Dancers, musicians, actresses, dancing girls, and other performers paid a significant amount in income tax. Instead of being progressive, these taxes were proportionate to the changing income. Additionally, a surplus profits tax was gathered. On top of that, there was a general sales tax that applied to all transactions, including the sale and purchase of buildings. Even gambling businesses were centrally managed, and taxes were levied on them.

Pilgrims had to pay a levy known as yatravetana. The basic principle was to give people protection from both internal and external danger rather than to overtax or exploit them. This was true even when funds were raised from all conceivable sources. The funds obtained in this way were used to fund social services including building roads, establishing educational facilities, creating new communities, and other community-beneficial endeavours.

In each and every country of the world, there are certain parameters for tax exemptions.