Tax Evasion in India-An Empirical Study with special reference to Regular Assessment

Abstract

Tax is a mandatory financial charge imposed on taxpayer by a Government to fund various public expenditures. Tax is basically of two types, one is Direct Tax and the other one is Indirect Tax. In this paper, an empirical study has been conducted with respect to collection of income tax by the Government, compliances by the assesses and the tax evasion with reference to regular assessment (RA). The primary objective of this study is to assess the quantum of tax evasion with respect to compliances by the tax payers and tax determined in the course of RA in India. In connection with the same a comparison also made between the quantum of RA in pre and post recession period. The study found a higher positive growth in RAT which indicates the existence of tax evasion in India and intention among the tax payers in adopting various methods in suppression of income and tax thereon. The study found one positive that the growth of RAT in the post recession period is lower as compared to the pre recession period. This may due to the new initiatives adopted by the Government from the year 2008-09 and its subsequent years which have a better outcome as it induce and obligate the tax payers to disclose their income and net assets adequately. Finally, the study shows that the present endeavor of the Govt in reduction of tax evasion will be beneficial in future.