Income tax is the only income which government can plan for the growth of the nation. But, in reality nobody is willing to pay the income tax. Everyone want to use the money for them only. Our finance minister, Mr. P. Chidambaram said that 2.89 percent of the population only have filed their taxes. Yearly, they have to pay the taxes for the income they are earning. In US, 45 % of the population pays taxes. People are not aware of the need for the tax.
As because the tax system is quite complicated, people are not ready to pay. During 2012-13 government budgeted that, Indians earning below 2 ,00,000 rupees annually are exempted to tax. And who are in between the 2,00,000 and 5,00,000 are subject to a 10 percent tax. And above 500000 and 1 million rupees, 20 percent tax, and those above 1 million a 30 percent rate.
But, the global wealth report says that, India now has some 1,500 ultra high net worth individuals with wealth of at least $50 million and 700 who have more than $100 million of assets. On the other side, the wall street journal reported that, 1,25,000 millionaires are there in India, but the problem is 95 percent of the country, has assets less that $10000, in equality lies.
In march, Chidambaram has announced that a temporary 10 percent surcharge that would be applied to the people who have an income of 10 million annually. But, the new tax would be applied only about 43,000 people in the country. Many people lies in the poor level only.
To address this issues, the government is monitoring the expenditures of the people. Yes, they have widen the tax by the money they spent, than the money they earned. Everyone has a mindset to hide their income . The finance ministry announced that , they are planning to probe the finances of about 1.2 million people who did not file tax returns last year who appeared to possess enough wealth to require paying taxes.
The Indian economist Nomura told the Journal that, “ if you can’t capture the income of them, just capture the expenditures, look at the people who are spending over a certain limit or have a certain lifestyle, and see if they are paying tax, if not just bring them into the system.
And another plan, they have made is to scrutinize the banks. The banks are the places, where the people will go and invest their black money. They scrutinize the transactions in the bank. People can’t transfer more than 50000 without the pan number, to check their tax status only.
And, they have scrutinized all the salaried people. All the companies are tied up with the income tax department, and all the finance department of each and every company has jointly with the government deducting the tax from the salaried people. So, they can’t hide the salary.
But, question arises with the self-employed people. They are the wealthy people in the country. They are doing lot of the illegal methods to reduce the tax, by showing all the sources like phone bills, servants’ wages, airfares for holidays. Even in agriculture, lot of farmers are rich.
The another issue is that, one fifth of India’s annual gross domestic product is lost due to unpaid taxes on the “ black economy”.
A New-Delhi businessmen told that “ why should I pay all my taxes while the politicians are getting richer and richer every day!”.
This is the main drawback. People have a mindset that, the politicians are earning income and grabbing assets every day. That is the reason , why people are not paying the tax.
So, it is in the hands of the government and the politicians to be as an examples. There should be regularity so that all the self-employed people should pay their tax. Always somebody can’t run behind the people and make them to pay the tax. The auditors and accountants of each and every company should be liable for this state.
The auditors of the nation, should be run a meeting at equal intervals. Yes, it is in the hands of the auditors, who can bring out the black economy outside. The purchases done by the self employed should be monitored.
And, it is the duty of each and every citizen to pay the Income tax, simply not on the threatening aspect.