Taxes are fee charged by a government on a product, income, or activity. If tax is levied directly on personal or corporate income, then it is a direct tax. If tax is levied on the price of a good or service, then it is called an indirect tax. The purpose of taxation is to finance government expenditure.
Income taxes were in existence since ancient times. References of well built taxation system are available in all ancient civilizations, Greek, Roman, or Indus Valley. Both Manu Smiriti and Arthshaastra provide details of variety of taxes levied in ancient India.