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A specific Act among the historic Indian income tax statutes introduced the concept of treating a Hindu Undivided Family as a distinct taxable entity. Which Act first did so?
Answer & Solution
Correct answer: D.
1. The 1886 Income Tax Act made several structural changes.
2. It treated the Hindu Undivided Family as a distinct taxable entity for the first time.
3. It also exempted agricultural income on account of pre-existing land revenue.
4. The 1918, 1922 and 1961 Acts built upon, but did not introduce, the HUF concept.
_Source: ICSI CS Executive Paper 4 (Tax Laws) — Lesson 1: Direct Taxes — At a Glance, pp. 10-22._
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