Direct Taxation in India: Trends and Patterns

In a developing country like India, government performs a very crucial role for the overall development. It needs to perform a large number of activities requiring a huge public expenditure. To meet this expenditure they require public revenue. Taxes are one of the important sources of public revenue. Taxes are not a recent origin. It was levied dates back to time immemorial. It can be classified into direct (impact & incidence on same person) and indirect (impact & incidence on different person) taxes. A report reveals that in India only 2.77% people pay income tax which has a very less proportion in compare to developed countries. So, government made a continuous effort to bring more people under the regime of taxation, so that public revenue can be increased. This paper is an attempt to study the taxation systems prevailed in the past and recent trends and patterns of direct taxation in India.