“Render unto Caesar things that are Caesar’s” is easier said than done. It is not so because of unwillingness of the subject to part with his money as tax but also because of genuine and inherent difficulties in determining the exact amount of tax payable to the State. Efforts are made by the State to enact laws not only for levy of the tax but also to lay down methods and procedures for determination of tax and administration thereof. More often than not, not only in our country but everywhere else, such efforts meet with varying degree of failure. This is mainly because of the fact that no law, howsoever efficiently drafted, can take care of all human values and relations which undergo changes with the passage of time but also the nature, scope, extent and manner of economic activities. It is not only the aforesaid changes which make obsolescence or ineffectiveness of law incurable but the speed with which these changes are taking place, especially in the post Second World War period, which makes it very difficult. Scientific and technological advancement is the biggest reason for the aforesaid changes. When these fast changes combine with normal human tendency to avoid taxes, the complexity of the problem increases manifold. In contrast to the aforesaid fast changing scenario of the economic activities, the State is required to mobilize larger and larger resources for the purpose of general social and economic development of the society. If frequent changes brought about by the State in the tax-laws in recent decades are viewed in the above perspective, the feeling of bitterness may be reduced to some extent.

…an excerpt from
A to Z of Capital Gains Tax in India
co-authored by Ashok Garg