Taxation in ancient time

The assumption of the king's absolute ownership of the land was followed by the right to tax as the next logical step. Manu claims that the monarch was the sole ruler of the country, and as such, he was entitled to a part of the land's bounty. To gift, sell, or purchase land, the king's approval was required. The king simply seemed to have total ownership; the land actually belonged to the people. The people would be OK as long as they farmed the land and paid their taxes, but if they didn't, the monarch would be able to use his authority and take the land away from them.

Bilateral contract

A bilateral agreement between the king and the people included this understanding. The populace would cultivate the land and pay taxes to the king in exchange for protection. The contract suggests that the people consented to a sovereign power that they established, that they volunteered to pay the tax, that the tax rate was set by the people, that the taxes are paid to the king as a salary for his protection, and that the monarch is answerable to the people.

The monarch has the power to tax, and it is the people's responsibility to pay taxes, which is a requirement of the king's execution of his responsibilities. This concept of the monarch's protection in regard to taxes is so crucial that some scriptures call for the king to make up for any stolen commodities that he fails to retrieve.

A donor will get tax exemptions under section 80 g of the income tax act.

Limits

The king was restricted in what he could tax. Knowing when to tax was important since there were better times than others. The person's nature was to be used to calculate how much tax was due. The wealthy were to be taxed heavily if they had amassed wealth via wrongdoing, while the success was to be taxed gradually and those who couldn't pay should never be taxed. There shouldn't be a tax threshold that is exceeded. Only profits and surpluses should be subject to taxation; increases should be made gradually and when necessary. The king should make use of the taxes to aid the populace.

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