PRINCIPLES OF TAXATION. 299 



income tax as it was in force in England. To get direct taxation 

 into good working order, even after a snitable model, wonld have 

 been a work of time and care, in the absence of any record of the 

 names and resources of householders. But what, except failure, 

 could attend a sudden call on relatively ignorant and unlettered 

 millions, at short notice, to assess themselves, or prove right of 

 exemption, to send in elaborate returns and calculations, and to 

 understand and watch their own interests under the system of 

 notices, surcharges, claims, abatements, installments, penalties, 

 and what not, consequent thereon ? Necessarily there followed a 

 long train of evils. An army of tax assessors and collectors tem- 

 porarily engaged could not be pure. They were aided by an army 

 of informers, actuated by direct gain or private animosity. 

 Frauds in assessment and collection went hand in hand with ex- 

 tortion in return for real or supposed exemption. Inquisition 

 into private affairs, fabrication of false accounts where true ones 

 did not exist or were inconvenient, acceptance of false returns, 

 rejection of honest ones, unequal treatment of the similarly cir- 

 cumstanced all these more or less prevailed. The tax reached 

 numbers not really liable, for zemindars illegally recovered it 

 from tenants and masters from servants, while underlings en- 

 riched themselves by the threat of a summons. 



"Subsequent acts in 1862, while affording relief in some re- 

 spects, practically stereotyped many inequalities and heartburn- 

 ings. In later years, the system of assessment by broad classes 

 was an improvement on the earlier complications, but the ad- 

 vance of local officers toward equitable assessment was perpetu- 

 ally being canceled by the alterations in rate and liability, which 

 I next notice. 



" Renewed direct taxation in British India thus made a false 

 start, from which it has never recovered. Possibly, with time 

 and care, a great improvement might have been effected, if the 

 law had remained unaltered. But, unluckily, with its too Eng- 

 lish form came the idea that the tax was to be, as in England, a 

 convenient means of rectifying budget inequalities, and a great 

 reserve in every financial or national emergency. In consequence 

 of this idea, incomes between Rs. 200 and Rs. 500, which had been 

 taxed at two per cent in 1860 were exempted in 1862, the four-per- 

 cent rate was reduced to three per cent in 1863, and the whole tax 

 was dropped in 1865. In 1867 it reappeared in the modified form 

 of a license tax, at the rate of only two per cent at most, but 

 reaching down again to incomes of Rs. 200. In 1868 it became a 

 certificate tax at rates a fifth lower, and again commencing with 

 a Rs. 500 limit. In 1869 it became once more a full-blown income 

 tax at one per cent on all incomes and profits of Rs. 500 and up- 

 ward. In the middle of the same year it was suddenly nearly 



