Tax System in Ancient India

Detailed information about ancient Indian tax system is available in texts such as Kautiliya Arthashastra, Manusmrti, Shukraniti and to some extent in Dharmasutras.

It encompasses topics like

• Nature of the tax
• Welfare of the taxpayer
• Amount of tax charged on various products
• Tax on agriculture
• Other taxes
• Exemptions given, etc.

This article attempts to explain the tax system as enumerated in the Dharmasutras, Kautiliya Arthashastra, Manusmriti and Shukraniti in relevance to the current times.

परिचयः ॥ Introduction

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.

शुल्कादेशा हट्टमार्गाः करसीमाः प्रकीर्तिताः । śulkādeśā haṭṭamārgāḥ karasīmāḥ prakīrtitāḥ । vastujātasyaikavāraṁ śulkaṁ grāhyaṁ prayatnataḥ ।।105।।

करन्यासनीतिः ॥ Taxation Policy

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

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.

शुल्कं मूल्याविरोधकम् । न हीनसममूल्याद्धि शुल्कं विक्रेतृतो हरेत् ।।१०७।। लाभं दृष्ट्वा हरेच्छुल्कं क्रेतृतश्च सदा नृपः ।...।।१०८।। śulkaṁ mūlyāvirodhakam । na hīnasamamūlyāddhi śulkaṁ vikretr̥to haret ।।107।। lābhaṁ dr̥ṣṭvā harecchulkaṁ kretr̥taśca sadā nr̥paḥ ।...।।108।।

With regards to farmers, the Shukraniti advises the ruler to first measure the agricultural land and classify its producing capacity as high, moderate or low before fixing the tax amount. It specifies that a ruler should tax the farmer in a way that he is not at loss.

बहुमध्याल्पफलितां भुवं मानमितां सदा ।।१०८।। ज्ञात्वा पूर्वं भागमिच्छुः पश्चाद्भागं विकल्पयेत् । हरेच्च कर्षकाद्भागं यथा नष्टो भवेन्न सः ।।१०९।। bahumadhyālpaphalitāṁ bhuvaṁ mānamitāṁ sadā ।।108।। jñātvā pūrvaṁ bhāgamicchuḥ paścādbhāgaṁ vikalpayet । harecca karṣakādbhāgaṁ yathā naṣṭo bhavenna saḥ ।।109।।

Interestingly, Shukraniti mentions that the ruler should charge

• 1/3rd amount as tax from the field that has a pond or well as its water source
• 1/4th amount as tax if the field is dependent on rains for its water
• Half its amount as tax if the field depends on a river for its water
• 1/6th amount if its a barren or stony land

तडागवापिकाकूपमातृकाद्देवमातृकात् । देशान्नदीमातृकात्तु राजाऽनुक्रमतः सदा ।।११२।। तृतीयांशं चतुर्थांशमर्धांशं तु हरेत्फलम् । षष्ठांशमूषरात्तद्वत्पाषाणादिसमाकुलात् ।।११३।। taḍāgavāpikākūpamātr̥kāddevamātr̥kāt । deśānnadīmātr̥kāttu rājā'nukramataḥ sadā ।।112।। tr̥tīyāṁśaṁ caturthāṁśamardhāṁśaṁ tu haretphalam । ṣaṣṭhāṁśamūṣarāttadvatpāṣāṇādisamākulāt ।।113।।

The shukraniti also highlights that before charging tax, expenses incurred on a product should be determined.

For example, in case of minerals, it states that the ruler should tax minerals in the following rates but after the expenses like payment for extraction, production, etc. have been considered.

• 1/2 the share of gold, gems, glass and lead
• 1/3rd share of silver
• 1/4th share of copper
• 1/6th share of zinc and iron

स्वर्णादर्धं च रजतात्तृतीयांशं चा ताम्रतः । चतुर्थांशं तु षष्ठांशं लोहाद्वङ्गाच्च सीसकात् ।।११५।। रत्नार्धं चैव क्षारार्धं खनिजाद्व्ययशेषतः । svarṇādardhaṁ ca rajatāttr̥tīyāṁśaṁ cā tāmrataḥ । caturthāṁśaṁ tu ṣaṣṭhāṁśaṁ lohādvaṅgācca sīsakāt ।।115।। ratnārdhaṁ caiva kṣārārdhaṁ khanijādvyayaśeṣataḥ ।

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.

तस्य वृद्ध्यै तडागं वा वापिकां कृत्रिमां नदीम् ।।११९।। कुर्वन्त्यन्यत् तद्विधं वा कर्षन्त्यभिनवां भुवम् यद्व्ययद्विगुणं यावन्न तेभ्यो भागमाहरेत् ।।१२०।। tasya vr̥ddhyai taḍāgaṁ vā vāpikāṁ kr̥trimāṁ nadīm ।।119।। kurvantyanyat tadvidhaṁ vā karṣantyabhinavāṁ bhuvam yadvyayadviguṇaṁ yāvanna tebhyo bhāgamāharet ।।120।।

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).

क्रयविक्रयं अध्वानं भक्तं च सपरिव्ययम् । योगक्षेमं च संप्रेक्ष्य वणिजो दापयेत्करान् । । ७.१२७ । । krayavikrayaṁ adhvānaṁ bhaktaṁ ca saparivyayam । yogakṣemaṁ ca saṁprekṣya vaṇijo dāpayetkarān । । 7.127 । ।

The Shukraniti also states that tax charged by the ruler should not be more than once. And that it should be collected with effort.

वस्तुजातस्यैकवारं शुल्कं ग्राह्यं प्रयत्नतः ।।१०५।। vastujātasyaikavāraṁ śulkaṁ grāhyaṁ prayatnataḥ ।।105।।

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.

करदातृणां हितम् ॥ Welfare of the Tax Payer

Ancient Indian texts reflect due importance given to the welfare of the taxpayer. They emphasize that the amount of tax should not be such that it destroys the taxpayer completely. In this regard, the Shukraniti gives the following example.

मालाकार इव ग्राह्यो भागो नाङ्गारकारवत् । mālākāra iva grāhyo bhāgo nāṅgārakāravat ।

Meaning: Tax should be realized in a fashion of a gardener and not as a coal merchant.

Suggesting that just like a gardener collects the flowers and fruits after having duly nourished the trees with care, a similar treatment should be given to the taxpayer.

The Manusmrti also conveys the same idea as follows.

यथा फलेन युज्येत राजा कर्ता च कर्मणाम् । तथावेक्ष्य नृपो राष्ट्रे कल्पयेत्सततं करान् । । ७.१२८ । । यथाल्पाल्पं अदन्त्याद्यं वार्योकोवत्सषट्पदाः । तथाल्पाल्पो ग्रहीतव्यो राष्ट्राद्राज्ञाब्दिकः करः । । ७.१२९ । ।

yathā phalena yujyeta rājā kartā ca karmaṇām । tathāvekṣya nr̥po rāṣṭre kalpayetsatataṁ karān । । 7.128 । ।yathālpālpaṁ adantyādyaṁ vāryokovatsaṣaṭpadāḥ । tathālpālpo grahītavyo rāṣṭrādrājñābdikaḥ karaḥ । । 7.129 । ।

Meaning: Tax should be taken in such a way that the ruler (government) and the businessman both may receive their award. As a leech, a calf and a black bee eat their food gently so little by little the ruler should draw from his kingdom the annual taxes.

That is, the Tax policy of the government should not affect the functioning of businessman and also it should be in such a way that there would be an increase in government treasury.

To curtail the ruler from collecting tax by injustice, the Yajnavalkya Smrti warns that if the tax is collected by injustice then the ruler immediately gets ruined along with his relatives.

अन्यायेन नृपो राष्ट्रात्स्वकोशं योऽभिवर्धयेत् । सोऽचिराद्विगतश्रीको नाशं एति सबान्धवः । । १.३४० । । anyāyena nr̥po rāṣṭrātsvakośaṁ yo'bhivardhayet । so'cirādvigataśrīko nāśaṁ eti sabāndhavaḥ । । 1.340 । ।

To emphasize that the tax collection should be used for the welfare of the subjects, the Shukraniti states that the collection of tax used for wife and children as well as for the enjoyment of oneself leads to hell and unhappiness.

स्त्रीपुत्रार्थं कृतो यश्च स्वोपभोगाय केवलम् । नरकायैव स ज्ञेयो न परत्र सुखप्रदः ।।४।। strīputrārthaṁ kr̥to yaśca svopabhogāya kevalam । narakāyaiva sa jñeyo na paratra sukhapradaḥ ।।4।।

It contemporary times it could be uderstood as the need for governments to untilize the amount of tax for eradicating the problems of subjects and avoid its utilizattion for providing more and more facilities to its authorities, etc.

करदानम् आबद्धम् ॥ Tax Compulsory

The ancient Indian treatises suggest that tax payment should be mandatory and not according to the desire of taxpayer. The Manusmrti states that the ruler may compel the other people (ie. besides those who are exempted) to pay tax during every year.

यत्किंचिदपि वर्षस्य दापयेत्करसंज्ञितम् । व्यवहारेण जीवन्तं राजा राष्ट्रे पृथग्जनम् । । ७.१३७ । । yatkiṁcidapi varṣasya dāpayetkarasaṁjñitam । vyavahāreṇa jīvantaṁ rājā rāṣṭre pr̥thagjanam । । 7.137 । ।

The Shukraniti also states that the ruler should promptly collect duties, etc. without any delay.

भूविभागं भृतिं शुल्कं वृद्धिमुत्कोचकं करम् । सद्य एव हरेत्सर्वं न तु कालविलम्बनैः ।। १२१ ।। bhūvibhāgaṁ bhr̥tiṁ śulkaṁ vr̥ddhimutkocakaṁ karam । sadya eva haretsarvaṁ na tu kālavilambanaiḥ ।। 121 ।।

करवर्धनम् ॥ Increment in Tax

It is suggested that in certain situations or in case of emergency tax can be increased. But in normal situation increment in tax should not be made. According to the Shukraniti, when the army is maintained to destroy the enemy, the ruler should receive special duties.

दण्डभूभागशुल्कानामाधिक्यात् कोशवर्धनम् । अनापदि न कुर्वीत तीर्थदेवकरग्रहात् ।। ९ ।।

यदा शत्रुविनाशार्थं बलसंरक्षणोद्यतः । विशिष्टदण्डशुल्कादि धनं लोकात्तदा हरेत् ।। १० ।।

daṇḍabhūbhāgaśulkānāmādhikyāt kośavardhanam । anāpadi na kurvīta tīrthadevakaragrahāt ।। 9 ।।

yadā śatruvināśārthaṁ balasaṁrakṣaṇodyataḥ । viśiṣṭadaṇḍaśulkādi dhanaṁ lokāttadā haret ।। 10 ।।

To apply the principle to current times it can be said that the government can increase taxes to undertake public welfare projects. The Arthashastra also indicates that when the treasury is below danger level then in that case the ruler may request his subjects, living in small or large villages, which do not depend fully on rainwater, to give 1/3 or 1/4 of the yield and according to the ability from small villages.

जनपदं महान्तं अल्प-प्रमाणं वाअदेव-मातृकं प्रभूत-धान्यं धान्यस्यांशं तृतीयं चतुर्थं वा याचेत । यथा-सारं मध्यं अवरं वा ।। ०५.२.०२ ।।

jana-padaṁ mahāntaṁ alpa-pramāṇaṁ vāadeva-mātr̥kaṁ prabhūta-dhānyaṁ dhānyasyāṁśaṁ tr̥tīyaṁ caturthaṁ vā yāceta । yathā-sāraṁ madhyaṁ avaraṁ vā ।। 05.2.02 ।।

उत्पादेषु करः ॥ Taxes on Various Products

The general rules regarding tax on products is enumerated as follows. The Shukraniti says,

• The ruler should either receive 32nd portion of the value of product as duty from the seller or buyer or take the 20th or 16th part of the profit as duty from the seller.
• In case of minerals, the ruler should realise the duties at following rates (excluding expenses) ie. 1/2 part of gold, 1/3rd of silver, 1/4th part of copper, 1/6th of zinc & iron, 1/2 of gems, 1/2 of glass & lead.
• In case of increase in population of animals such as goats, sheeps, cows, buffaloes, and horses 1/8th part of the increased portion and 1/16th part of the milk of she buffaloes, she goats and female sheep can be taken as a tax.
• 1/32nd portion of the increase or interest can be taken as tax from the usurers (Money-lenders).

द्वात्रिंशांशं हरेद्राजा विक्रेतुः क्रेतुरेव वा ।। १०६ ।। विंशांशं वा षोडशांशं शुल्कं मूल्याविरोधकम् ।

स्वर्णादर्धं च रजतात्तृतीयांशं चा ताम्रतः । चतुर्थांशं तु षष्ठांशं लोहाद्वङ्गाच्च सीसकात् ।।११५।। रत्नार्धं चैव क्षारार्धं खनिजाद्व्ययशेषतः ।

अजाविगोमहिष्यश्व वृद्धितोऽष्टांशमाहरेत् । महिष्यजाविगोदुग्धात्षोडशांशं हरेन्नृपः ।। ११८ ।।

वार्धुषिकाच्च कौसीदाद् द्वात्रिंशांशं हरेन्नृपः ।...।। १२६ ।।

dvātriṁśāṁśaṁ haredrājā vikretuḥ kretureva vā ।। 106 ।। viṁśāṁśaṁ vā ṣoḍaśāṁśaṁ śulkaṁ mūlyāvirodhakam ।

svarṇādardhaṁ ca rajatāttr̥tīyāṁśaṁ cā tāmrataḥ । caturthāṁśaṁ tu ṣaṣṭhāṁśaṁ lohādvaṅgācca sīsakāt ।।115।। ratnārdhaṁ caiva kṣārārdhaṁ khanijādvyayaśeṣataḥ ।

ajāvigomahiṣyaśva vr̥ddhito'ṣṭāṁśamāharet । mahiṣyajāvigodugdhātṣoḍaśāṁśaṁ harennr̥paḥ ।। 118 ।।

vārdhuṣikācca kausīdād dvātriṁśāṁśaṁ harennr̥paḥ ।...।। 126 ।।

According to the Manusmrti,

• 1/6th part is to be taken of trees, meat, honey, clarified butter, perfumes, medicinal herbs, poisons, flowers, roots, vegetables, grass, earthen vessels and of all things made up of stone.
• While the artisans and workers who subsist by bodily labour should work one day per month for the ruler.

आददीताथ षड्भागं द्रुमांसमधुसर्पिषाम् । गन्धौषधिरसानां च पुष्पमूलफलस्य च ।। ७.१३१ ।।

पत्रशाकतृणानां च चर्मणां वैदलस्य च । मृन्मयानां च भाण्डानां सर्वस्याश्ममयस्य च ।। ७.१३२ ।।

कारुकाञ् शिल्पिनश्चैव शूद्रांस्चात्मोपजीविनः । एकैकं कारयेत्कर्म मासि मासि महीपतिः । । ७.१३८ । ।

ādadītātha ṣaḍbhāgaṁ drumāṁsamadhusarpiṣām । gandhauṣadhirasānāṁ ca puṣpamūlaphalasya ca ।। 7.131 ।।

patraśākatr̥ṇānāṁ ca carmaṇāṁ vaidalasya ca । mr̥nmayānāṁ ca bhāṇḍānāṁ sarvasyāśmamayasya ca ।। 7.132 ।।

kārukāñ śilpinaścaiva śūdrāṁscātmopajīvinaḥ । ekaikaṁ kārayetkarma māsi māsi mahīpatiḥ । । 7.138 । ।

Detailed information regarding the rates of tax that is to be charged on various products is also given in Kautiliya Arthashastra. It says,

• They (the tax collectors) may demand of cultivators one-fourth of their grain, and one-sixth of forest produce (vanya) and of such commodities as cotton, wax, fabrics, barks of trees, hemp, wool, silk, medicines, sandal, flowers, fruits, vegetables, firewood, bamboos, flesh, and dried flesh.
• They may also take one-half of all ivory and skins of animals, and punish with the first fine those who trade in any article without obtaining a license from the ruler.

चतुर्थं अंशं धान्यानां षष्ठं वन्यानां तूल-लाक्षा-क्षौम-वल्क-कार्पास-रौम-कौशेय-कौषध-गन्ध-पुष्प-फल-शाक-पण्यानां काष्ठ-वेणु-मांस-वल्लूराणां च गृह्णीयुः । दन्त-अजिनस्यार्धं ।। ०५.२.१४ ।। तदनिसृष्टं विक्रीणानस्य पूर्वः साहस-दण्डः ।। ०५.२.१५ ।। caturthaṁ aṁśaṁ dhānyānāṁ ṣaṣṭhaṁ vanyānāṁ tūla-lākṣā-kṣauma-valka-kārpāsa-rauma-kauśeya-kauṣadha-gandha-puṣpa-phala-śāka-paṇyānāṁ kāṣṭha-veṇu-māṁsa-vallūrāṇāṁ ca gr̥hṇīyuḥ । danta-ajinasyārdhaṁ ।। 05.2.14 ।। tadanisr̥ṣṭaṁ vikrīṇānasya pūrvaḥ sāhasa-daṇḍaḥ ।। 05.2.15 ।।

As for merchants in trade, the following tax amounts applied:

• Merchants dealing in gold, silver, diamonds, precious stones, pearls, coral, horses, and elephants shall pay 50 karas.
• Those that trade in cotton threads, clothes, copper, brass, bronze, sandal, medicines, and liquor shall pay 40 karas.
• Those that trade in grains, liquids, metals (loha), and deal with carts shall pay 30 karas.
• Those that carry on their trade in glass (kacha); and also artisans of fine workmanship shall pay 20 karas.
• Articles of inferior workmanship, as well as those who keep prostitutes, shall pay 10 karas.
• Those that trade in firewood, bamboos, stones, earthen-pots, cooked rice, and vegetables shall pay 5 karas.
• Dramatists and prostitutes shall pay half of their wages.
• Persons rearing cocks and pigs shall surrender to the Government half of their stock of animals. Those that rear inferior animals shall give one-sixth. Those that keep cows, buffaloes, mules, asses, and camels shall give one-tenth (of their live-stock).

सुवर्ण-रजत-वज्र-मणि-मुक्ता-प्रवाल-अश्व-हस्ति-पण्याः पञ्चाशत्-कराः ।। ०५.२.१७ ।। सूत्र-वस्त्र-ताम्र-वृत्त-कंस-गन्ध-भैषज्य-शीधु-पण्याश्चत्वारिंशत्-कराः ।। ०५.२.१८ ।। धान्य-रस-लोह-पण्याः शकट-व्यवहारिणश्च त्रिंशत्-कराः ।। ०५.२.१९ ।। काच-व्यवहारिणो महा-कारवश्च विंशति-कराः ।। ०५.२.२० ।। क्षुद्र-कारवो बन्धकी-पोषकाश्च दश-कराः ।। ०५.२.२१ ।। काष्ठ-वेणु-पाषाण-मृद्-भाण्ड-पक्व-अन्न-हरित-पण्याः पञ्च-कराः ।। ०५.२.२२ ।। कुशीलवा रूप-आजीवाश्च वेतन-अर्धं दद्युः ।। ०५.२.२३ ।। कुक्कुट-सूकरं अर्धं दद्यात् । क्षुद्र-पशवः षड्-भागम् । गो-महिष-अश्वतर-खर-उष्ट्राश्च दश-भागं ।। ०५.२.२७ ।।

suvarṇa-rajata-vajra-maṇi-muktā-pravāla-aśva-hasti-paṇyāḥ pañcāśat-karāḥ ।। 05.2.17 ।। sūtra-vastra-tāmra-vr̥tta-kaṁsa-gandha-bhaiṣajya-śīdhu-paṇyāścatvāriṁśat-karāḥ ।। 05.2.18 ।। dhānya-rasa-loha-paṇyāḥ śakaṭa-vyavahāriṇaśca triṁśat-karāḥ ।। 05.2.19 ।। kāca-vyavahāriṇo mahā-kāravaśca viṁśati-karāḥ ।। 05.2.20 ।। kṣudra-kāravo bandhakī-poṣakāśca daśa-karāḥ ।। 05.2.21 ।। kāṣṭha-veṇu-pāṣāṇa-mr̥d-bhāṇḍa-pakva-anna-harita-paṇyāḥ pañca-karāḥ ।। 05.2.22 ।। kuśīlavā rūpa-ājīvāśca vetana-ardhaṁ dadyuḥ ।। 05.2.23 ।। kukkuṭa-sūkaraṁ ardhaṁ dadyāt । kṣudra-paśavaḥ ṣaḍ-bhāgam । go-mahiṣa-aśvatara-khara-uṣṭrāśca daśa-bhāgaṁ ।। 05.2.27 ।।

From the above information it can be concluded that high tax was charged on precious metals like gold, silver, etc. and low tax was charged on less expensive, but widely usable metals, products.

Interestingly, the Shukraniti states that if excess tax is received, then there was provision to return some part of the tax to the tax payer themselves.

For eg. It is said that if the ruler gets 100 silver Karshas from the cultivator, he should give back to him 20 karshas.

राजभागस्तु रजतशतकर्षमितो यतः । कर्षकाल्लभ्यते तस्मै विंशांशमुत्सृजेन्नृपः ।। ११४ ।। rājabhāgastu rajataśatakarṣamito yataḥ । karṣakāllabhyate tasmai viṁśāṁśamutsr̥jennr̥paḥ ।। 114 ।।

The Kautiliya Arthashastra suggests that those who give much tax by themselves, should be suitably honoured, so that they may be motivated. For example,

सारतो वा हिरण्यं आढ्यान्याचेत । यथा-उपकारं वा । स्व-वशा वा यदुपहरेयुः ।। ०५.२.३५ ।।

स्थानच्-छत्र-वेष्टन-विभूषाश्चएषां हिरण्येन प्रयच्छेत् ।। ०५.२.३६ ।।

sārato vā hiraṇyaṁ āḍhyānyāceta । yathā-upakāraṁ vā । sva-vaśā vā yadupahareyuḥ ।। 05.2.35 ।।

sthānac-chatra-veṣṭana-vibhūṣāścaeṣāṁ hiraṇyena prayacchet ।। 05.2.36 ।।

Meaning: Those who, of their own accord or with the intention of doing good, offer their wealth to the ruler should be honoured with a rank in the court, an umbrella, or a turban or some ornaments in return for their gold.

कृषिकरः ॥ Tax on Agriculture

Agricultural field was not exempted from tax. Usually in many texts it is mentioned that l/6th part of grains (agricultural product) should be taken as tax. Regarding this, Shukraniti conveys that the ruler should ascertain the quantity of tax from the land. The land should be divided as high capacity and low capacity yield land and accordingly should charge the tax.

बहुमध्याल्पफलितां भुवं मानमितां सदा ।।१०८।। ज्ञात्वा पूर्वं भागमिच्छुः पश्चाद्भागं विकल्पयेत् ।...।।१०९।। bahumadhyālpaphalitāṁ bhuvaṁ mānamitāṁ sadā ।।108।। jñātvā pūrvaṁ bhāgamicchuḥ paścādbhāgaṁ vikalpayet ।...।।109।।

In short, it can be said that, according to the nature of land the amount of tax was decided.

अन्ये कराः ॥ Other Taxes

Other taxes such as octroi, etc. were also collected. Infact, Kautiliya Arthashastra informs about the octroi to be collected from different products.

बाह्यं आभ्यन्तरं चऽतिथ्यं ।। ०२.२२.०१ ।। निष्क्राम्यं प्रवेश्यं च शुल्कं ।। ०२.२२.०२ ।। प्रवेश्यानां मूल्य-पञ्च-भागः ।। ०२.२२.०३ ।। पुष्प-फल-शाक-मूल-कन्द-वाल्लिक्य-बीज-शुष्क-मत्स्य-मांसानां षड्-भागं गृह्णीयात् ।। ०२.२२.०४ ।। शङ्ख-वज्र-मणि-मुक्ता-प्रवाल-हाराणां तज्-जात-पुरुषैः कारयेत्कृत-कर्म-प्रमाण-काल-वेतन-फल-निष्पत्तिभिः ।। ०२.२२.०५ ।। क्षौम-दुकूल-क्रिमितान-कङ्कट-हरिताल-मनःशिला-अञ्जन-हिङ्गुलुक-लोह-वर्णधातूनां चन्दन-अगुरु-कटुक-किण्व-अवराणां चर्म-दन्त-आस्तरण-प्रावरण-क्रिमिजातानां आज-एडकस्य च दश-भागः पञ्च-दश-भागो वा ।। ०२.२२.०६ ।। वस्त्र-चतुष्पद-द्विपद-सूत्र-कार्पास-गन्ध-भैषज्य-काष्ठ-वेणु-वल्कल-चर्म-मृद्भाण्डानां धान्य-स्नेह-क्षार-लवण-मद्य-पक्वान्नादीनां च विंशति-भागः पञ्च-विंशति-भागो वा ।। ०२.२२.०७ ।। द्वारादेयं शुल्कं पञ्च-भागः आनुग्राहिकं वा यथा-देश-उपकारं स्थापय्तेत् ।। ०२.२२.०८ ।। जातिभूमिषु च पण्यानां विक्रयः ।। ०२.२२.०९ ।। खनिभ्यो धातु-पण्यादाने षट्छतं अत्ययः ।। ०२.२२.१० ।। पुष्प-फल-वाटेभ्यः पुष्प-फल-आदाने चतुष्-पञ्चाशत्-पणो दण्डः ।। ०२.२२.११ ।। षण्डेभ्यः शाक-मूल-कन्द-आदाने पाद-ऊनं द्वि-पञ्चाशत्-पणो दण्डः ।। ०२.२२.१२ ।। क्षेत्रेभ्यः सर्व-सस्य-आदाने त्रि-पञ्चाशत्-पणः ।। ०२.२२.१३ ।। पणो अध्यर्ध-पणश्च सीता-अत्ययः ।। ०२.२२.१४ ।। अतो नव-पुराणां देश-जाति-चरित्रतः । ।। ०२.२२.१५अ ब ।। पण्यानां स्थापयेत् शुक्लं अत्ययं चापकारतः ।। ०२.२२.१५च्द् ।।

bāhyaṁ ābhyantaraṁ ca'tithyaṁ ।। 02.22.01 ।। niṣkrāmyaṁ praveśyaṁ ca śulkaṁ ।। 02.22.02 ।। praveśyānāṁ mūlya-pañca-bhāgaḥ ।। 02.22.03 ।। puṣpa-phala-śāka-mūla-kanda-vāllikya-bīja-śuṣka-matsya-māṁsānāṁ ṣaḍ-bhāgaṁ gr̥hṇīyāt ।। 02.22.04 ।। śaṅkha-vajra-maṇi-muktā-pravāla-hārāṇāṁ taj-jāta-puruṣaiḥ kārayetkr̥ta-karma-pramāṇa-kāla-vetana-phala-niṣpattibhiḥ ।। 02.22.05 ।। kṣauma-dukūla-krimitāna-kaṅkaṭa-haritāla-manaḥśilā-añjana-hiṅguluka-loha-varṇadhātūnāṁ candana-aguru-kaṭuka-kiṇva-avarāṇāṁ carma-danta-āstaraṇa-prāvaraṇa-krimijātānāṁ āja-eḍakasya ca daśa-bhāgaḥ pañca-daśa-bhāgo vā ।। 02.22.06 ।। vastra-catuṣpada-dvipada-sūtra-kārpāsa-gandha-bhaiṣajya-kāṣṭha-veṇu-valkala-carma-mr̥dbhāṇḍānāṁ dhānya-sneha-kṣāra-lavaṇa-madya-pakvānnādīnāṁ ca viṁśati-bhāgaḥ pañca-viṁśati-bhāgo vā ।। 02.22.07 ।। dvārādeyaṁ śulkaṁ pañca-bhāgaḥ ānugrāhikaṁ vā yathā-deśa-upakāraṁ sthāpaytet ।। 02.22.08 ।। jātibhūmiṣu ca paṇyānāṁ vikrayaḥ ।। 02.22.09 ।। khanibhyo dhātu-paṇyādāne ṣaṭchataṁ atyayaḥ ।। 02.22.10 ।। puṣpa-phala-vāṭebhyaḥ puṣpa-phala-ādāne catuṣ-pañcāśat-paṇo daṇḍaḥ ।। 02.22.11 ।। ṣaṇḍebhyaḥ śāka-mūla-kanda-ādāne pāda-ūnaṁ dvi-pañcāśat-paṇo daṇḍaḥ ।। 02.22.12 ।। kṣetrebhyaḥ sarva-sasya-ādāne tri-pañcāśat-paṇaḥ ।। 02.22.13 ।। paṇo adhyardha-paṇaśca sītā-atyayaḥ ।। 02.22.14 ।। ato nava-purāṇāṁ deśa-jāti-caritrataḥ । ।। 02.22.15a ba ।। paṇyānāṁ sthāpayet śuklaṁ atyayaṁ cāpakārataḥ ।। 02.22.15 ।।

Meaning:

• Merchandise, external (bahyam ie. arriving from country parts), internal (abhyantaram ie. manufactured inside forts), or foreign (atithyam ie. imported from foreign countries) shall all be liable to the payment of toll alike when exported (nishkramya) and imported (praveshyam).

• Imported commodities shall pay 1/5th of their value as toll.

• Of flowers, fruits, vegetables (shaka), roots (mula), bulbous roots (kanda), pallikya, seeds, dried fish and dried meat, the suprintendent shall receive 1/6th as toll.

• As regards, conch shells, diamonds, precious stones, pearls, corals and necklaces, experts acquainted with the time, cost, and finish of the production of such articles shall fix the amount of toll.

• Of fibrous garments (kshauma), cotton clothes (dukula), silk (krimitana), mail armour (kankata), sulphuret of arsenic (haritala), red arsenic (manassila), vermilion (hingulaka), metals (loha), and colouring ingredients (varnadhatu); of sandal, brown sandal (agaru), pungents (katuka), ferments (kinva) dress (avarana), and the like; of wine, ivory, skins, raw materials used in making fibrous or cotton garments, carpets, curtains (pravarana), and products yielded by worms (krimijata); and of wool and other products yielded by goats and sheep, he shall receive 1/10th or 1/15th as toll.

• Of clothes (vastra), quadrupeds, bipeds, threads, cotton, scents, medicines, wood, bamboo, fibres (valkala), skins and clay pots; of grains, oils, sugar (kshara), salt, liquor (madya), cooked rice and the like, he shall receive 1/20th or 1/25th as toll.

• Gate dues (dvaradeya) shall be 1/5th of the toll dues; this tax may be remitted if circumstances necessitate such favour.

• Commodities shall never be sold where they are grown or manufactured.

• When minerals and other commodities are purchased from mines, a fine of 600 Panas shall be imposed.

• When flowers or fruits are purchased from flower or fruit gardens, a fine of 54 Panas shall be imposed.

• When vegetables, roots, bulbous roots are purchased from vegetable gardens, a fine of 51 3/4th Panas shall be imposed.

• When any kind of grass or grain is purchased from field, a fine of 53 Panas shall be imposed.

• (Permanent) fines of 1 Pana and 1 1/2 Panas shall be levied on agricultural produce (sitatyayah).

• Hence in accordance with the customs of countries or of communities, the rate of toll shall be fixed on commodities, either older new; and fines shall be fixed in proportion to the gravity of ofences.

The Vishnu Smrti states that in case of imported products l/5th part should be taken as octroi and in case of domestic products 1/10 part should be taken.

स्वदेशपण्याच्च शुल्कांशं दशमं आदद्यात् । । ३.२९ । । परदेशपण्याच्च विंशतितमं । । ३.३० । । svadeśapaṇyācca śulkāṁśaṁ daśamaṁ ādadyāt । । 3.29 । । paradeśapaṇyācca viṁśatitamaṁ । । 3.30 । ।

The Baudhayana Dharma Sutra mentions about 'samudra shulka' (custom duty). In case of products imported from foreign land, samudra shulka is suggested to be imposed.

सामुद्र-शुल्को वरं रूपम् । उद्धृत्य दश-पणं शतम् ॥ (1.10.13/14) sāmudra-śulko varaṁ rūpam । uddhr̥tya daśa-paṇaṁ śatam ॥ (1.10.13/14)

The ruler should take expensive, precious products as tax and he can charge 10% on remaining goods. Shukraniti mentions about land tax that should be taken from shopkeepers.

तथा चापणिकेभ्यस्तु पण्यभूशुल्कमाहरेत् । मार्गसंस्काररक्षार्थं मार्गगेभ्यो हरेत फलम् ॥१२७॥ tathā cāpaṇikebhyastu paṇyabhūśulkamāharet । mārgasaṁskārarakṣārthaṁ mārgagebhyo hareta phalam ॥127॥

Meaning: For the maintenance and repair of the streets, tax should be charged from those who use the streets.

परिहारः ॥ Exemptions

Apastamba Dharmasutra gives the list of people who should be exempted from tax. They are:

• Sages
• Shudras
• Women of all varnas
• Young ones (who do not hold beard)
• Students staying in Ashrama
• Blind people
• Dumb
• Deaf
• Diseased persons (Apastambadharmasutra 11-10)

Brahmanas were also exempted from Agricultural tax because they used to participate in the religious activities of the ruler. By doing this they increased the merits of the ruler.

Regarding the Tax Collector

On local level the king should appoint officers called grāmapas. King should give them 1 /6th, l/7th, l/12th or l/16,h part the tax as a salary (Šukranīti - 4.2.12 ?).

According to Kautiliya Arthašastra, 'samāhartā' is the tax collector. He should divide the kingdom (janapada) in such a way so as to facilitate the arrangement into several heads, such as that is exempt from taxation (parihãraka), that supplies soldiers (âyudhîya), that pays taxes in the form of grains, cattle, gold, etc. and those that supplies free labour and dairy products as taxes (Kautilîya Arthašastra - adhyâya 56)

समाहर्ता चतुर्धा जन-अप्दं विभज्य ज्येष्ठ-मध्यम-कनिष्ठ-विभागेन ग्राम-अग्रं परिहारकं आयुधीयं धान्य-पशु-हिरण्य-कुप्य-विष्टि-प्रतिकरं इदं एतावदिति निबन्धयेत् ।। ०२.३५.०१ ।।

Gopa as a village accountant is given the responsibility to look after the revenues of about 5 to 10 villages. He shall register gifts, sales, charities, etc. He shall also decide upon the houses as tax paying or non-tax paying ones (Kautilîya Arthašāstra - adhyâya 56)

तत्-प्रदिष्टः पञ्च-ग्रामीं दश-ग्रामीं वा गोपश्चिन्तयेत् ।। ०२.३५.०२ ।। सीम-अवरोधेन ग्राम-अग्रम् । कृष्ट-अकृष्ट-स्थल-केदार-आराम-षण्ड-वाट-वन-वास्तु-चैत्य-देव-गृह-सेतु-बन्ध-श्मशान-सत्त्र-प्रपा-पुण्य-स्थान-विवीत-पथि-सङ्ख्यानेन क्षेत्र-अग्रम् । तेन सीम्नां क्षेत्राणां च करद-अकरद-सङ्ख्यानेन ।। ०२.३५.०३ ।।

Conclusion

By studying the principles of taxation we can say that the tax policy in ancient India was framed in such a way that there would be equal distribution of wealth and also the welfare of each and every citizen was ensured.

There are many such points discussed in the paper that are currently being followed. They are:

1. Tax was also taken from the buyer. (Currently it is taken in the form of sales tax, service tax, etc.)
2. It can be said that the system of auditing which is there at present, not exactly of that kind, but similar to that, a system was there determining the profits, etc.
3. Exemption was given to handicapped people, etc. (Currently according to section "80 D" of Income Tax Act, exemption upto a certain limit is given to physically handicapped people)

Points relevant to modern age

1. Control on the amount of tax.
2. Tax charged on luxurious products should be more than the basic commodities.
3. Tax on agricultural field should be charged after determining the productivity of agriculture.

Thus, the government can impose the tax policy in such a way that the citizens and businessman would not be abolished completely, but they would themselves pay the taxes without any delay.