Land revenue was the main source of income. Bhaga was the royal share of the produce. It was generally one-sixth of the produce but ranged from one-fourth to one-eighth as well.
It was based on land utilised by each cultivator and was based on the yield, that is, the fertility of the land. The state was taken to be the owner of the land. Slaves were made to work on the lands.
There was heavy taxation by the state and even the peasants had to pay a large number of taxes including irrigation tax and cattle tax. It is suggested that the taxes described in Arthashastra must have considerably burdened the peasants.
Apart from the bali, which was additional to the bhaga, there was the customary pindakara paid by husbandsmen which was assessed for village-groups.
Probably hiranya (literally, gold) was a tax paid in cash. A fiscal measure for emergency described in the Arthashastra and also mentioned by Panini was pranaya. It was one-third or one-fourth of the produce from the soil.
Though it literally means a voluntary gift, it must have become an obligatory tax. Apart from land revenue, the peasants paid taxes on catties and senabhakta to pay for the army’s expenditure when it passed through their territories.
Kara was placed on sale of flowers and fruits. There was also toll-tax and trade tax on articles sold, forest tax, mine-tax, fish tax and license tax.
The Mauryan kings had the policy of reserving half of the state’s income for emergency purposes and so, many taxes were collected, in kind. This put additional burden on the people, also affecting flow of goods in the market and capital formation.
The state owned forests, and estate areas had their own factories for production of many kinds of items. The state also owned mines and traded exclusively in mineral products.
It controlled trade by waterways and played a direct role in the organisation and development of agriculture, trade and industry. Additional income also came from confiscation of property owned by individuals on many grounds.