INDLt N INCOME ?F2.X 811 which go to place India is country compared States. Se cond?y, explain this poor yield. In the first an undeveloped and purely agricultural with England or even the United the defects in the law i?self (the English income tax machinery was absent), and hence the difficulties of getting true knowledge of incomes, were enormous. Every one liable to the tax was asked to hand in a return of his income, but a large portion understated the income and thus the honest tax- payers paid for the dishonest. ? For instance, in what were then called the North-Western Provinces, now the United Provinces of Agra snd Oudh, out of every hundred returns, about four represented approximate incomes or were acceptable to the authorities, while about 18 failed to make a return. s Hore than one-fifth of the total tax was paid by public officials and the ruudholders, this portion being deducted at source, which seems to be the only redeeming feature of the Act. It is also true that the low minimum of. Rs. 200 caused a grea? hardship which the Govern- ment remedied by raising the minimum to Rs. 500 in 1862. The rate was also abnormally high for the time and this fact was conceded by the government in 1868,' when the general rate was reduced from four to three per cent. Again the assessments were neither revised from year to year, nor even once during the five year period. Finall? the tax was a temporary one, and the Government unwillingly fulfilled its promise by abandoning the tax in 1865, only to return to some other form of. direct taxation two years after. (f) Conclusion. It is admitted that the income tax of 1860 was not operated successfully, especially the idea of bui!ding local public works, out of the proceeds of the ?ncome tax was an unhappy one, al- though it was put in the law in order to make the I F?woett Committee, 1871, Vol. I, Q.9074 s Report on the Inooms Tax in the N.W. Pmvinoes, 1861.62, p. 45. 41
