A Systematic Review of Income Tax Reforms in India: Trends, Challenges, and Economic Implications

Income Tax Reforms, Tax Policy, Economic Growth, Tax Compliance, Fiscal Development

This study provides a systematic review of income tax reforms in India, examining their evolving trends, key challenges, and broader economic implications. Drawing on secondary data from scholarly literature, policy reports, and government publications, the paper traces the transformation of the tax system from the framework established under the Income-tax Act, 1961 to contemporary reforms emphasizing simplification, digitization, and enhanced compliance. The review identifies major trends, including rationalization of tax rates, expansion of the tax base, and the adoption of technology-driven administration. It also highlights persistent challenges such as tax evasion, policy complexity, and administrative inefficiencies. Furthermore, the study evaluates the impact of these reforms on economic growth, investment patterns, and income distribution. The findings suggest that while reforms have improved efficiency and transparency, structural issues remain, necessitating continuous policy refinement and institutional strengthening for sustainable fiscal development.