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Ancient India

Principles of taxation in ancient India

Principle of taxation in ancient India

Dr. B. Prasad

(Dy retirees. Gen. Manager, SBI) *

As defined in the dictionary Wykepedia taxes are "compulsory charges levied by a Government for the purpose of financing services performed for the common benefit. "In the words of Mill, taxation is the" state of existence Governments "(Principles of Political Economy). There is no denying the fact that no government can function without incurring a significant expense on governance and well-being of its people. And the contributions of these people in taxes are the most important elements of financial resources in government. This position is not limited to governments in modern times ", but only existed through the ages, ancient and medieval, but its existence may be traced to the evolution of humanity in the political organization. The ancient India was no exception in this regard. There is no shortage of evidence in the form of references and inferences in documents of this period. Vedic texts, epics, Smriti, Puranas, Arthashatra, literary and epigraphic texts of the time, all doubt dwell on the importance of taxes to governments. From the Vedic period, there was a regular system of taxation. The exercise of technical terms such as "Bali", "shulka 'Bhaga', ' udaja "and" Niraja are frequently mentioned in the literature of this period that a legitimate and reasonably support the view that taxation has evolved from mandatory and voluntary character of regularity. King of the Rig Veda was the "single customer" of taxes and did not even hesitate to use force to achieve the status of contributions fell in arrears2. The Atharvaveda refers to the State share "in the village, in horses and cows (cows) 3. However, it is unclear what proportion of the state had the richness of its people. It seems that over time during the Vedic period itself, the tax has begun to touch the lives of the population so that the tendency to escape to taxes began to gain ground among the influential people of society. The Brahmins were the first to invoke immunity taxes possibly on the basis of being engaged in unproductive vocations4. However, the simple nature of taxation Vedic did not last long because it was no longer sufficient to meet the growing needs of the government arising from the sweeping economic, social and political occurred during the post Vedic Indian history. This has spawned a number of general rules or canons of taxation.

Modern scholars on the ancient Indian policy to maintain the principles of the Hindu taxation in high esteem. "It is the right Constitutional taxation has been a law of life, regulation of life. "Whatever the form of government, it was, taxation has not been an object of the rule caprice5. Some scholars go as far to say that the modern maxim of "capacity to pay taxes" "Sacrifice theory" were the guiding principles in the former India6. Historical accounts, however, disagrees with the estimates eloquent of these scholars, as it would be obvious to the critical review of available data in the various texts of the period under review.

The first principle of modern taxation is that it is compulsory. In ancient Indian texts, there is abundant evidence to show that the taxes mandatory payments have been well

* 55 Apts Unesco., C-203, Patparganj, Delhi -110092

cherished and cultivated. Manu Smriti prescribes fees for everyone. "Even a poor man who maintained a subsequent occupation, was required to pay something every annually through Kara (taxes), while workers such as cooks, craftsmen such as blacksmiths, Shudras who subsist by manual labor were required to work for the state a day in a month7. Kautilya is somewhat new and has not even spared a hermit who were required to pay taxes the corus they collected8. This system seems to have prevailed even during the Gupta period of Indian history as witnessed by Sakuntalam Kalidasa and Raghuvamsa. "The hermits too provided the king with a sixth part of the grains they collected in thinking it was a tax pay to that them'9 protected. However, the tax system all changes introduced later, which is evident from the writings Lakshmidhara of a minister under Gahadavalas. He said that everyone "must contribute (tax) to the extent of potential capacity." He adds that "he who has no resources should not be asked to pay tax 10.

The king in ancient India is repeatedly urged in the literature of this period to observe the sacred laws as prescribed in the Scriptures, while applying taxes. The great epic Mahabharata opines that "tax by Reason is a means of preservation." The king must complete his treasure "with a sixth part on a calculation of the fair return ground that his homage to other fines and forfeitures levied on offenders11. A similar view is held by many other legislators at the time. Vasistha, for example, recommends the payment of taxes when the king rules in accordance with laws12 sacred. Manu holds that the king should cause the turnover are collected annually by officials of trust and tax matters, it must obey the sacred laws and behave like a father to his subjects13. Apastamba, another legislator asked the king to collect only taxes14 legal. The frequent reference to "legal fees" has led many researchers to conclude that this amounted to modern principle of taxation according to law. They argue that the charges have been laid down by the sacred laws and the king had no power to impose any new tax and it could strengthen the former. KP Jayaswal, in his "Hindu Polity argues that" the constitutional right tax is a living law regulating the life ... they were fixed by law and the scales have been incorporated in the sacred law municipality. The consequence was whatever form of government, the issue of taxation was not a whim of the sovereign subject. "15 Jayaswal was Saletore followed by BA, which estimates that "taxation is not a matter of either chance or whim of the monarch's hand .... the king's action was limited by provisions in the Dharmasastras. "16 Another scholar, Balkrishna firmly believes that" the abuses of arbitrary taxation has been minimized by not allowing the king to levy any tax which was not sanctioned by the Vedic and the laws or custom'17 Smriti. It seems that these researchers were influenced more by emotions than by reason of the mention of sacred laws from ancient Hindu thinkers on taxation. Reference common to laws in their sacred writings imply that only those taxes which were specified by the State, should be collected by the authorities. Nowhere in the above statements it said that the charges have been laid down by the sacred texts. Only that Vasistha argued that if the king did not rule in accordance with the sacred laws taxes should not be paid, but even he does not say that taxes were fixed and sections to be taxed have been decided for ever. "Taxes lawful" reference as prescribed by scriptures was only a reminder or a notice to the state / king cons be oppressive in the collection and tax collection. By Therefore, too much is not read the word, "taxes lawful" as assumed by the scholars mentioned above. In addition, it is well known that the right to tax and to provide fair or unfair government always rested with the sovereign state. This is because the sole sovereign invested the power to wield the scepter of Danda. Furthermore, it is not proper to assume that the literature of this period all current taxes during their time. Data provided by them is thin and sparse and, moreover, they rarely give a uniformity of thought and system. During the period under review a number of sacred texts came into existence, but it is not clear from the text that has worked as a guide to the king. In fact, there was not universal tax law applicable to all conditions and all time. The state could freely and easily change existing rules to fit the purpose and meet the needs of the occasion. Given these facts, the thesis of these authors that "the charges have been laid down by the scriptures, do not come out unscathed and in fact is reduced to a simple mistake.

The next cannon of taxation, as prescribed by the ancient thinkers is that taxes should be modest and inexpensive to his subjects. Manu expresses the opinion that the King "always fix in his realm the duties and taxes so that he and the man who did the work receive their just reward. "18 He continues that" the leaching, the calf and the bee take their food little by little, even if the draw is the king of his kingdom moderate annual fees "19. Kulluk in his commentary on Manu states that taxes should be made from" what is beyond the capital (mooladhanamanuchchhindata) "20. Based on the above texts, Saletore believes that income, not capital should be taxed. Leaching, veal, and bees do not destroy the source, while taking their food21. Manu view is elucidated in the Arthasastra of Kautilya. "Everything as the fruit is picked from the garden as often as they become ripe, when revenue should be collected as often as they become mature 22. Kautilya and Manu recommend continuous sample but at the same time, they also warn that if the maxim is applied without discrimination would result in a financial suicide. Perhaps because of this fear seems to have offered Manu a supplementary item in its previous text. It King warns that we should not cut its own root do not receive the tax or the root of other (men) by excessive greed, because by cutting its own root or it is done and wretched23. He offered simple advice to the king that he should not take what should not be taken, or even if is rich, he should waive his due if they were simply being small24. As Manu, Kautilya has also indicated that "the collection of revenue or when green fruit was bound to sap the very source of production and put an immense danger for the state25.

The fear of harming the source and the sober advice to the state to collect taxes moderate and too easy installments have been advocated in many other texts as well. Here too, the precepts are responsible picturesque similes and metaphors. The Mahabharata Udyogaparva opines that "any like a bee draws honey, but at the same time leave intact the flower, even the king tax his subjects without harming them. He should act as a manufacturer of bees and garlands, and not as maker26 charcoal. The analogy of honey bee drawing gradually occurs in the Santiparva and elsewhere too. The king is advised not to offend the paps that the calf did not. It should suck his kingdom like a leaching blood slightly, carrying a tigress its little by touching them with his teeth, like a mouse which, although sharp teeth produces a gentle rocking of the feet when you bite one person27 sleep. The text, he said again. It states that intelligent king should milk his kingdom on the analogy of the calf. If the calf is allowed to suck, it becomes harder and carries heavy loads. If, on the other hand, the cow is milked the calf is too weak and incapable of being useful to its owner. Similarly, if the kingdom is imposed by negligence, the whole economy of the state will paralysed'28. "As a person who wants to milk obtained not by cutting the teats of the cow, if a king who uses unreasonable taxes, undermining the motivation of production itself. The subjects, when properly examined, the yield of grain and money to the state as a mother's milk to her child'29 happy.

The comparison of taxation of the kingdom and milk the cow repeatedly occurs in the classics and other books as authoritative well30. Tradition is maintained even in recent works on polity. The Pancatantra requires that the gardener picks the fruit and flowers, but does not harm trees, the bee sucks the honey, but does not damage the flower, the same way the king would raise his taxes without causing any difficulty to his subjects31. The text also states that one who kills the goat, at best, can get a meal, but he who feeds him well, can get milk for several years31.

It be observed that the canons of taxation above conceived and advocated by Hindu legislators lays an emphasis on the principle of the charge continues to achieve little by little (Alpalpa). But these small doses of taxes were sure to suck the people dry in how leeches, Calves and bees help themselves to food. "Taxes, more taxes, more taxes" seems to be the slogan of the Hindu thoughts32 tax. However, the Hindu thinkers have viewed the inherent danger of abuse and, therefore, they came with a simple notice to the king. "Under any case, the capital, which constituted the sole basis of those "productive force, should be imposed. Only net income to be taxed as often it is derived. The principle of taxing capital income and not is probably worthwhile and beneficial, but the reality check shows that it state that has seen most income people. Historical data from the period show that, at least with the beginning of imperial history of ancient India, people have paid three types of taxes, namely. central, provincial and local levels, each of these minors with many other processes. People are very often used to suffer what is evident from frequent references to excessive and arbitrary taxes resulting from people leaving their occupation and migration to other places33.

The Buddhist literature also echo sentiments identical tax collection. The Divyavadana mentions that how good the two ministers of a king criticized him by warning that the kingdoms are like flowers and plants and fruit trees which, if properly nourished, flowers and fruit yield in a timely manner so that the protected kingdom tax returns and "Income 34. On the other hand, the two ministers evil which immediately succeeded to the office well, that advised the king, like the sesame "has no oil if it is made to try to turn to music, oppressed and squeezed, it is the kingdom'35. These two states varied show that the kinds of taxes depends entirely on the will of the sovereign of the soft state.

Canons of taxation in analog form occur in the literature and Tamil. In Purram observed that even if the land is less than a master, it could be a ball of dried rice and continue to to feed an elephant every day for a long time but on the other hand, even if the land is large and the elephant allowed to eat at will, the amount of trampling damage will be enormous and far more than what he normally uses. Similarly, if a king Smart collects taxes fair and moderate, his treasure would increase a thousand times and it must itself get recognition and glory. If you lack wisdom and is surrounded by evil agents and taxes upon his subjects by negligence, as the elephant into the store of rice, he earns wrath of all and that the state to ruin and is despised36. The Kural, compares a king who asks his subjects to pay more taxes than which is due to a thief so strong with the sword in his hand asking for a solo traveler to abandon all its possessions37. Such analogies are obviously low taxes and unfortunate consequences of crushing taxes. They also refer to the usual recipes fixed. The validity of these statements are, however, is suspect in southern India where there are taxes and the most unusual heavy38. Kural statement refers to the collection of taxes and advised the king not to let her play with people's greed is hard won fruits of their labor.

The principle of taxation as prescribed in the ancient Indian scriptures is that if, at a tax increase is inevitable, it must be gradual and not sudden and abrupt. The Mahabharata opine that little bit of money must be extracted from prosperous areas. The king is expected to increase the burden of his subjects and as a person in progressively increasing the load of a young bullock38. Kautilya also promotes a gradual increase taxes39. The sentiment is also shared by Kamandaka. His advice to the king, is that subjects are like a seed-shot difficult, if properly fed and cared for, it gives ample harvest in time, so the subjects of a State. Like a cow is both trendy and fed and milked at any other time, as are the subjects. Florist both trend and sprinkles water on his plants and flowers them40 slaughter.

In regard to trade and industry throughout ancient texts favors taxing only the net income after taking into account the purchase price and other expenses. The Mahabharata advises the king to "set the rules tax on operators, after considering their sale and purchase costs on the way "41. Manu also holds an identical view when he says that the king should take the taxes on the merchants on their articles, after proper investigation into the sale price and purchase, the distance over which they were raised, spending on road transport and to keep them safe from thieves and robbers and the calculation of profits expenses42 total. Based on the above versions of ancient texts, the UN Ghoshal rightly concludes that "this rule undoubtedly shows an appreciation of difficulties in computing the profits of merchants and indicates an attempt to throw the burden of tax on net income instead of charging the same the Capital 43. This, Ghoshal compared with the first principle of Sismondi taxation, namely, "that all taxes should fall on income and not on the capital44. Lakshmidhara, a minister Gahadwalas also provides that the fees should be based on some elementary considerations, such as the cost of establishment, maintenance costs and the cost for the safe custody of the goods before the tax rates were fixed45. Moreover, in this regard, counsel Kautilya Shukra and that taxes on products should be achieved once46.

In the case of craftsmen, Mahabharara advises the king, before tax, it must consider the work and skill involved and the necessities of life today them47 days required.

The foregoing inferences to the canons of taxation of ancient India reveal certain maxims. The first is that taxation is compulsory and each individual must contribute to state revenue or service made in lieu of taxes in proportion to its capacity. This compares to some extent with the first canon of Adam Smith, namely "the subjects of every state ought to contribute towards supporting the government as much as possible, in proportion to their respective abilities; which is a proportion of income which he enjoys under the protection of the state "48.However, there is a small difference between the principle of taxation of Adam Smith and the one advocated by Hindu legislators. According to Adam Smith, if a person does not win something, it is not required to pay a tax, but in the financial system of ancient India, even the smallest income should be taxed even if a person did not win anything, he was required to contribute to the state as labour49. However, instances of social order and personal circumstances of a role-playing person in the tax system in ancient India are also not wanting. During the Vedic period and even later, people belonging to the class Bramhmana were found by asserting that since they were engaged in the vocation to provide education as nonperforming and performing religious rituals, they should not be asked to pay taxes like everyone else. Kautilya says in his Arthashastra even the security element of the tax on Hindu - system. He said the charges were to be made known and some taxpayers the amount of tax, items must be taxed and the time otherwise pay the tax collectors could realize more than what is prescribed and appropriating a portion of the collection of their own benefit.50. Kautilya went to the extent of prescribing the punishment for these transgressions officials51. This maxim security in Hindu thought exercise seems close to the second canon of Adam Smith, ie "the tax that each individual is liable to be certain and not arbitrary. The time of payment, payment method, the quality of being paid, must all be clear and plain to the contributor and any other person 52.

The focus next, guns Hindu land on is that taxes should be collected at one time and the most appropriate place for taxpayers. Most analogies relating to charges that were discussed above focus on the element convenience. This maxim is very close third barrel Adam Smith, namely, "All taxes shall be levied at the time and manner which is more likely to be convenient for the contributor to pay it. "53

The maxim of taxation emphasizes Hindu that a reasonable margin should always be left with the State Budget after meeting the cost of tax collection. It seems that Kautilya was grasped the reality and thus form its tax policy during the Maurya period of Indian history. He advises the king in his Arthashastra appoint agents for the Trust to tax collection purposes. He went to the extent to prescribe penalties for those tax collectors who were found engaged in siphoning state revenue54. This element of certainty in the tax Hindu compares to a great extent with Adam Smith's fourth and final gun taxation: "All taxes shall be provided at the time to go out and keep it in people's pockets as little as possible beyond what it brings in the treasury of the state '55. The other aspect of the economy principle, namely "the production and consumption should not be impeded, seems to be the criterion for Hindu thinkers on thoughts56 tax.

Without doubt, the tax system as advocated by Hindu thinkers is full of metaphors and meaningful comparisons. Let us pause a moment and consider, if the canons of taxation were in force, in reality, as eloquent as they were carried out in Scripture? Can there be a comparison made with the modern theory Tax? The fact is that there can be a rigid and accurate comparison of Hindu canon. Only the conclusions to the extent of GIST can be observed in almost all the sacred words of the Hindu legislators. Thus, Mahabharata provides heavy taxes on the rich who enjoy protection Maximum state57. This, however, met for the first canon to some extent Adam Smith, namely "the ability to pay taxes," but not the theory of progression. Some researchers are in Manu (former legislator) that taxes have been levied on income and not capital, what do they compare with the doctrine of progressive taxation58. But tax revenue is not necessarily an increase in taxes to increase revenues. However, the closest similarity with progressive taxation is seen in Medhatithi on Manu VII-128 which, in his commentary says that there is no rule for setting fees in the case of trading profits and that when the benefits are significant, a greater rate may be applied59.

Sometimes, despite the canons of taxation sounding very high, quite the opposite also happened and people have suffered due to arbitrary and oppressive taxes. Jatakas and other information sources such as inscriptions and literary texts of the time shed light on how individuals have fled their homes to escape the tax collectors. However, this aspect of taxation, namely oppressive taxation, is outside the scope of this research paper and it is proposed to deal with in another article. For now, it is sufficient to conclude that the principle CFO before the thinkers of ancient India was that "it is not the kingdom heavily taxed that runs great things, but moderately taxed a "60. Although the guns Hindus are embedded with beautiful metaphors and similes and brought with them great ambitions and plans of piles, but in fact they were more in the nature of the holy precepts that actually followed by the king in his kingdom. Given the actual position and pious thoughts found not always move together, it is difficult to agree with those scholars who believe that "the Hindu theory avoid the common fallacy that looks Taxation 61. However, the possibility of halting this trend is quite possible.

To summarize, principles of the fee specified in the ancient Hindu texts are not necessarily deal with the fiscal policy of governments of the day did not over the state to treat them as considerations are in the evolution of fiscal policy. The canons of taxation, variously expressed and defended in the sacred texts are indeed one and the same. They are simply a modification of one or the other and move around the theme is that the king should not resort to arbitrary and oppressive taxes. Most guns are only applicable in the work of collection and not in decision making policy.

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References:

1. Rigveda (Ap) III.43.5;. V54; Atharvaveda (AV) IV.22.3. 8; 7.16 VIII.
2. RV.
3. Av.IV.22.27.
4. Shatapatha Brahmana (Sat Br) V3.3.12;. XIII.4.4.29, V. 4.2.3
5. Hindu polity - pp 319 et seq.
6. Paaya. (Public Administration in Ancient India). P.180
7. Manu Smriti (Manu). VII.137-138; Smriti Gautam (Gaut.) X.31, 34; Smriti Vishnu Smriti Shukra (Shukra), (Vishnu) III.32. IV.2, 121.
8. Arthashastra (Arth.) Bk.II. ch.7.
9. Shakuntalam p.76; Raghuvamsha V. 8
10. Lakshmidhara, p55, pp91-92
11. Mahabharata (Mbh.). XII. 71. 10
12. Vashishta (Vas) I. 42
13. Manu. VII. 80, 119 X.
14. Apastamba. II. 10. 26. 9.
15. Hindu Polity. p. 319 et seq.
16. IYPE (Indian Thoughts old policies and institutions). P. 171 ff
17. Paaya .. P 180
18. Manu. VII. 128; Mbh. XII. 87. 170-180.
19. Manu. VII. 129.
20. Kulluk on Manu. VII. 129-130.
21. IYPE. P. 171 ff ..
22. Arth. Bk. V. Ch II.
23. Manu. VII. 139.
24. Manu. VII. 170-171.
25. Arth. Bk. II. Ch I.; Mbh. XII. 87. 18.
26. Mbh. (Udyogaparva). 34. 17-18.
27. Mbh.XII. 88. 4-6
28. Mbh. XII. 87. 20-22.
29. Mbh. XII. 71. 16-19.
30. Shubhashitaratnagar. III Ch. 4. 406; Raghuvamsha Kalidasa. I. 26.
31. Panchatantra (Panch.). I. 243.
32. Kamandaka. V. 87.
33. The Jatakas (Buddhist texts)., Rajatarangini and some other historical rcorder are full of such references, which refers to oppressive taxes and welfare of people.
34. , 35.History of Dharmashastras by PV Kane. III. P. 184; Dhammapada.49; Divyavadana. Pp562-563.

36 Purram .. 184, 197.

37 Kural. 552.

38 Polity South India (Mahalingam TV) History of Tamil literature. (Dikshitar VRP).

39 Arth. Bk. V. 11; IV. 9;. See Shantiparva.88. 26; 130.26 27.

40 Kamandaka. VI. 14; V. 84.

41 Mbh. XII. 87. 13-14;. See Shukra. IV. 2, 214-215.

Manu 42. VII. 127, cf. Agnipurana. 223.14 Ch.

43 recipes in the Hindu system (HRS). p. 19.

44 HRS. p19.

45 Lakshmidhara. (Intro.). P. 55 cf.

46 Arth. Bk. II. Ch 12, cf. Shukra. II. 345-346, 351-352.

47 Mbh. XII. 87.15.

48 Wealth of Nations cited in Enclopaedia Britannica.

Manu 49. VII. 137-138; Gaut. X. 31-34; Vishnu. III. 32. 1,. Shukra. IV. 2. 121.

50 Arth. Bk. II. Ch 8.

51 Art. Bk. II. Ch 9.

52 Wealth of Nations.

53 Wealth of Nations.

54 Arth. Bk. II. Ch.8, Ch 9

55 Wealth of Nations

56 Arth. Bk. II. Ch.8; Kamandaka. V. 8, 77-78; IV. 7. 48; Shukra. II. 345-346, 351-352.

57 Mbh. XII. 129

58 Introduction to Finanace public. P4.

Cited in 59 HRS. p. 23.

60 Mbh. XII. 41.22.

61 Recipes in the Hindu system.

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