India has a well developed tax structure. The Constitution of India empowers the legislature to enact and enforce tax laws. The taxes so collected are required to be divided between the Central Government and the State Governments. The Central government levies direct taxes such as personal income tax and corporate tax, and also indirect taxes like customs duties, excise duties and central sales tax. The states in turn are empowered to levy state sales tax, entertainment tax etc. apart from various other local taxes like entry tax, octroi, etc.

In the wake of economic reforms, the tax system of our country has underwent significant changes over the past six years. The tax rates have been rationalised and now compare favourably with most other countries. Further, the tax laws have been simplified to ensure better compliance.

At present, the Income Tax Department under the Department of Revenue in the Ministry of Finance administers the following Tax Laws. (The Gift Tax Act and the Estate Duty Act which were also administered by the Income Tax Department in earlier years have now been repealed).

Nature of Tax	Statute
Income tax	Income-Tax Act, 1961
Wealth tax	Wealth-Tax Act, 1957
Interest tax	Interest-`Tax Act, 1974
Expenditure tax	Expenditure-Tax Act, 1987

DUTIES OF THE DEPARTMENT

The role of Income Tax Deptt. is manifold. The Indian Revenue Service Officers are responsible for administering fiscal laws like the Income Tax Act, Wealth Tax Act, Interest Tax Act, Expenditure Tax Act, etc. The immediate object is to collect tax and to detect and deter tax evasion. They also have a duty towards the tax paying public. They advise the public of their rights and duties as part of creating an environment of mutual trust between the deptartment and the public. The second role of the department is to help achieve the socio-economic objectives of the government through planned tax legislation and thus contribute to the implementation of the government's wider policies. The department also negotiates and implements wide ranging Double Taxation Avoidance Agreements.