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In ancient Indian texts, the term 'Shulka' refers to the ruler's share received from the buyer and the seller ie. tax.   

In ancient Indian texts, the term 'Shulka' refers to the ruler's share received from the buyer and the seller ie. tax.   

The sources of tax are mentioned as market streets, boundary areas of the market, etc.<ref name=":0" /> <blockquote>शुल्कादेशा हट्टमार्गाः करसीमाः प्रकीर्तिताः । वस्तुजातस्यैकवारं शुल्कं ग्राह्यं प्रयत्नतः ।।१०५।।<ref name=":5" />

The sources of tax are mentioned as market streets, boundary areas of the market, etc.<ref name=":0" /> <blockquote>शुल्कादेशा हट्टमार्गाः करसीमाः प्रकीर्तिताः । <ref name=":5" />

śulkādeśā haṭṭamārgāḥ karasīmāḥ prakīrtitāḥ । vastujātasyaikavāraṁ śulkaṁ grāhyaṁ prayatnataḥ ।।105।।</blockquote>

śulkādeśā haṭṭamārgāḥ karasīmāḥ prakīrtitāḥ । vastujātasyaikavāraṁ śulkaṁ grāhyaṁ prayatnataḥ ।।105।।</blockquote>

Some of the prominent principles of taxation as gleaned from ancient Indian texts are as follows:  

Some of the prominent principles of taxation as gleaned from ancient Indian texts are as follows:  

=== Tax on Profit and not on Capital ===

=== मूल्याविरोधकं शुल्कम् ॥ Tax on Profit, Not on Capital ===

The Shukraniti states that tax should not be charged on capital. It deters the ruler from taxing sellers who get value less than or equal to the value of the product. It emphasizes that tax should be charged after determining the profits of the businessman.<ref name=":0" /> <blockquote>शुल्कं मूल्याविरोधकम् । न हीनसममूल्याद्धि शुल्कं विक्रेतृतो हरेत् ।।१०७।। लाभं दृष्ट्वा हरेच्छुल्कं क्रेतृतश्च सदा नृपः ।...।।१०८।।<ref name=":5" />

The Shukraniti states that tax should not be charged on capital. It deters the ruler from taxing sellers who get value less than or equal to the value of the product. It emphasizes that tax should be charged after determining the profits of the businessman.<ref name=":0" /> <blockquote>शुल्कं मूल्याविरोधकम् । न हीनसममूल्याद्धि शुल्कं विक्रेतृतो हरेत् ।।१०७।। लाभं दृष्ट्वा हरेच्छुल्कं क्रेतृतश्च सदा नृपः ।...।।१०८।।<ref name=":5" />

svarṇādardhaṁ ca rajatāttr̥tīyāṁśaṁ cā tāmrataḥ । caturthāṁśaṁ tu ṣaṣṭhāṁśaṁ lohādvaṅgācca sīsakāt ।।115।। ratnārdhaṁ caiva kṣārārdhaṁ khanijādvyayaśeṣataḥ ।</blockquote>Infact, in case of people establishing new industries, cultivating new lands, digging canals, wells, etc. for the welfare of the region, the Shukraniti prohibits the ruler from demanding tax from such people until they achieve profit that is twice their expenditure.<ref name=":0" /><blockquote>तस्य वृद्ध्यै तडागं वा वापिकां कृत्रिमां नदीम् ।।११९।। कुर्वन्त्यन्यत् तद्विधं वा कर्षन्त्यभिनवां भुवम् यद्व्ययद्विगुणं यावन्न तेभ्यो भागमाहरेत्  ।।१२०।।<ref name=":5" />

svarṇādardhaṁ ca rajatāttr̥tīyāṁśaṁ cā tāmrataḥ । caturthāṁśaṁ tu ṣaṣṭhāṁśaṁ lohādvaṅgācca sīsakāt ।।115।। ratnārdhaṁ caiva kṣārārdhaṁ khanijādvyayaśeṣataḥ ।</blockquote>Infact, in case of people establishing new industries, cultivating new lands, digging canals, wells, etc. for the welfare of the region, the Shukraniti prohibits the ruler from demanding tax from such people until they achieve profit that is twice their expenditure.<ref name=":0" /><blockquote>तस्य वृद्ध्यै तडागं वा वापिकां कृत्रिमां नदीम् ।।११९।। कुर्वन्त्यन्यत् तद्विधं वा कर्षन्त्यभिनवां भुवम् यद्व्ययद्विगुणं यावन्न तेभ्यो भागमाहरेत्  ।।१२०।।<ref name=":5" />

tasya vr̥ddhyai taḍāgaṁ vā vāpikāṁ kr̥trimāṁ nadīm ।।119।। kurvantyanyat tadvidhaṁ vā karṣantyabhinavāṁ bhuvam yadvyayadviguṇaṁ yāvanna tebhyo bhāgamāharet ।।120।।</blockquote>The Manusmrti also states that traders should be made to pay the duties after due investigation of the details of buying and selling, the journey involved (transportation cost) and the measure of safety (preservation cost).<ref name=":0">Rohan Kulkarni (2010), [http://www.jstor.org/stable/42931268 Tax System According to ’KAUṬILĪYA ARTHAŚA͞STRA, MANUSMṚTI AND ŚUKRANĪTI, and its relevance], Bulletin of the Deccan College Research Institute, Vol.70/71, P.439–443.</ref><blockquote>क्रयविक्रयं अध्वानं भक्तं च सपरिव्ययम् । योगक्षेमं च संप्रेक्ष्य वणिजो दापयेत्करान् । । ७.१२७ । ।<ref name=":1">Manusmrti, [https://sa.wikisource.org/wiki/%E0%A4%AE%E0%A4%A8%E0%A5%81%E0%A4%B8%E0%A5%8D%E0%A4%AE%E0%A5%83%E0%A4%A4%E0%A4%BF%E0%A4%83/%E0%A4%B8%E0%A4%AA%E0%A5%8D%E0%A4%A4%E0%A4%AE%E0%A5%8B%E0%A4%A7%E0%A5%8D%E0%A4%AF%E0%A4%BE%E0%A4%AF%E0%A4%83 Adhyaya 7]</ref></blockquote>The tax charged by the king should not be more than once. Tax should not be collected by fraud.

tasya vr̥ddhyai taḍāgaṁ vā vāpikāṁ kr̥trimāṁ nadīm ।।119।। kurvantyanyat tadvidhaṁ vā karṣantyabhinavāṁ bhuvam yadvyayadviguṇaṁ yāvanna tebhyo bhāgamāharet ।।120।।</blockquote>The Manusmrti also states that traders should be made to pay the duties after due investigation of the details of buying and selling, the journey involved (transportation cost) and the measure of safety (preservation cost).<ref name=":0">Rohan Kulkarni (2010), [http://www.jstor.org/stable/42931268 Tax System According to ’KAUṬILĪYA ARTHAŚA͞STRA, MANUSMṚTI AND ŚUKRANĪTI, and its relevance], Bulletin of the Deccan College Research Institute, Vol.70/71, P.439–443.</ref><blockquote>क्रयविक्रयं अध्वानं भक्तं च सपरिव्ययम् । योगक्षेमं च संप्रेक्ष्य वणिजो दापयेत्करान् । । ७.१२७ । ।<ref name=":1">Manusmrti, [https://sa.wikisource.org/wiki/%E0%A4%AE%E0%A4%A8%E0%A5%81%E0%A4%B8%E0%A5%8D%E0%A4%AE%E0%A5%83%E0%A4%A4%E0%A4%BF%E0%A4%83/%E0%A4%B8%E0%A4%AA%E0%A5%8D%E0%A4%A4%E0%A4%AE%E0%A5%8B%E0%A4%A7%E0%A5%8D%E0%A4%AF%E0%A4%BE%E0%A4%AF%E0%A4%83 Adhyaya 7]</ref></blockquote>The Shukraniti also states that tax charged by the ruler should not be more than once. And that it should be collected with effort.<ref name=":0" /><ref name=":6" /> <blockquote>वस्तुजातस्यैकवारं शुल्कं ग्राह्यं प्रयत्नतः ।।१०५।।<ref name=":5" /> vastujātasyaikavāraṁ śulkaṁ grāhyaṁ prayatnataḥ ।।105।। </blockquote>Applied to contemporary times, it simply suggests that tax imposed once on a commodity or the income of a person should not be imposed again on the same.<ref name=":0" />

 

(Shukraniti - 4.2.106 ?, Kautilîya Arthashastra - adhyaya 92 ?).  

 

Applying the principle to current situation, it can be said that, tax imposed once on a commodity or the income of a person should not be imposed again on the same.

=== Welfare of the tax payer ===

=== Welfare of the tax payer ===