Image Source : INDIA TV A key fact about Income Tax in the Union Budget.
Union Budget 2025: Finance Minister Nirmala Sitharaman is set to present the Union Budget 2025 in Parliament on Saturday, February 1. This will be her eighth budget presentation which will also make her the first full-time female Finance Minister to achieve this milestone. Sitharaman has previously presented six annual budgets and two interim budgets under the Narendra Modi-led NDA government, which secured its third consecutive term in 2024. This will be her second full-fledged budget in the current NDA tenure.
As anticipation builds, taxpayers, businesses, and industry experts are expected to closely watch the announcements, particularly around tax reforms, economic growth strategies, and social welfare measures, which could shape India’s financial landscape in the coming year. The budget session will commence with President Droupadi Murmu addressing the joint sitting of the Parliament on January 31. According to a report by ICRA, the government is expected to provide some relief to personal income taxpayers in the Union Budget for FY2026.
As the Union Finance Minister prepares to present the Union Budget 2025, one of the most anticipated aspects remains income tax — a key concern for millions of taxpayers. But have you ever wondered when Income Tax was first introduced in India’s Union Budget? Let’s know about this fact here.
History of Income Tax in Union Budget
India’s first-ever budget was presented on April 7, 1860, by Scottish economist James Wilson from the East India Company. This historic budget introduced income tax, a major source of revenue for the government even today. The taxation system established then laid the foundation for India’s evolving fiscal policies over the decades. Over time, the tax regime evolved, with several amendments shaping the modern income tax structure of the country.
After India gained independence, the country’s first budget was presented on November 26, 1947, by RK Shanmukham Chetty, who served as India’s first finance minister. This budget primarily focused on managing the economic transition of a newly independent nation, dealing with partition-related financial challenges, and laying the groundwork for a self-sufficient economy.
Following independence, the Income Tax Act came into effect on April 1, 1962. It replaced previous laws and streamlined direct taxation in India. This legislation remains the foundation of India’s income tax system, undergoing periodic revisions to align with economic conditions and policy objectives.
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