Medieval Milestone In Tax Administration- Dr. Ankit Agarwal, CA

The medieval period broadly may further be classified into three phases: Taxation in Medieval Era:

    The Delhi Sultanate            The Mughal                 The Maratha

1. The Delhi Sultanate existed from 1206 until 1526 CE. The Sultanate Period refers to the time in Indian history when the region was under the rule of various Muslim sultans. The Sultans imposed a number of different types of indirect taxes, including as customs duties on commercial transactions and toll levies on products that were transported through various modes of transportation.
   During the reign of the sultanate, there were two prominent institutions. One of them was the iqta, which involved the transferable assignment of territorial taxes and military expenses. Another significant source of revenue for the state during the sultanate period was a tax on land known as kharaj. There was also the practice of zakat, which is a levy that requires people to provide alms. During the reign of Ala-Ud-Din Khilzi, a tax was imposed at a rate of one-fifth of the whole produce. This tax was then increased to half of the produce during the period of Muhammad Tughlak. The sultanate also required fawazil, which referred to any excess revenue that was directed into the royal treasury. Instead, the sultans possessed a khalisa, which referred to certain territories that were directly governed by the sultans themselves.
   In medieval India, an another form of tax called Zazia was implemented, specifically targeting non-Muslims for payment. The rate was adjusted based on the income of the taxpayer.
   
   
   
   2. The Mughal Period
   
   During the Mughal era, the primary source of income was derived from levying taxes on agricultural yields, with peasants being responsible for paying these taxes to their respective headmen or local chieftains. Todar Mal, the revenue minister of Akbar, conducted a comprehensive survey of crop yields, prices, and cultivated lands over a period of ten years. Based on that, he established tax rates for each crop. The province was partitioned into revenue circles. Each circle had distinct revenue rates for every crop. The revenue system was referred to as ‘zabt’. The Mughals enforced the payment of Zazia, mostly targeting non-Muslim communities. However, Emperor Akbar later abolished this practice. Unfortunately, the last Mughal Emperor, Aurangzeb, re-introduced the imposition of Zazia on Hindus in 1679. The individuals were also remitting tax in the form of agricultural yield to the monarch

Abu’l Fazl’s Ain-I Akbari contains a substantial amount of statistical data and serves as the primary source for understanding the Indian economy during the Mughal period. He rationalized the implementation of taxes by the government, arguing that they serve as compensation for the exercise of sovereign power, provided in exchange for safety and justice. The taxation system during the Mughal Empire was organized, although it did not follow a universal tax system. Even throughout that period, the land tax remained a significant aspect of the Indian economy. It constituted half of the overall yield. The tax amount fluctuated based on the production and the minimum cost of subsistence for peasants in different regions of the empire. The land tax, referred to as mal or kharaj, was levied as a proportion of the crop yield following harvest. The Ghalla-bakhshi, kankut, and jabt system were developed for the purpose of land income assessment.

Ghalla-bakhshi was an agricultural practice that involved the sharing of crops. It was referred to as bhaoli and batai in certain regions. Kankut or dambandi was a method used to assess the quantity of grain produced. In Kankut, the field was initially measured and then the revenue demand was set based on the estimated productivity per bigha. Sher Shah implemented a standardized agricultural productivity method called Rai. Rai was imposed on each bigh produce for areas that were consistently cultivated. Akbar’s reign adopted Sher Shah’s approach, known as Zabti, which became the primary method for assessing grain production. The tax rate was determined based on the productivity of each unit of land, referred to as biha, and expressed in monetary terms. The fluctuating tax rate in several regions over the year is referred to as dasturs.



3. The Maratha Period



Shivaji eliminated the jagir and zamindari structure and created direct communication with the cultivators. The entire property was surveyed and partitioned into various classifications. Under his reign, taxation was set at a fixed rate of 40% of the whole yield, which might be paid in either goods or money. There existed a system of financial assistance and convenient payment plans in the event of unfavorable circumstances. Shivaji implemented two additional taxes, named Chauth and Sardeshmukhi, in order to improve
revenue. The Chauth represented a quarter (25%) and the Sardeshmukhi represented one-tenth (10%) of the total yield collected from the entire area.


To summarize, the primary focus of indirect taxes in ancient and medieval India was on activities related to trade and the market. These activities included customs charges, tolls, and market taxes. It was common practice to provide specifics about these systems in administrative writings, and they developed in tandem with shifting political and economic realities.

Dr. Ankit Agarwal, CA