Dear Friends
I have given below an interesting article about the tax burden on Salaried
class.
As given in this report the rich people are evading payment of tax in many ways
but the salary class have to bear most of the tax burden. The salaried class
have to pay Income tax even after retirement since their pension is treated as
salary and the tax is deducted at source. As per the report , the Income tax
department has no sufficient manpower to trace the big tax evaders and for this
reason Salaried class people have to bear the tax burden.
As long as the tax evasion by the rich people continues, the tax burden on
Salaried class people will also continue.
S.V.SAI BABA
Salaried class bears most of tax burden
* Topics:
* Taxes
Mail Today, On Thursday 10 March 2011, 11:59 AM
More than half of India's 3.4 crore income tax payers contribute insignificant
amounts as tax, with figures ranging from a paltry Rs 50 to Rs 1,000 in most
cases.
This reduces the effective tax base to around 1.5 crore tax payers, which
includes mainly corporate houses and the salaried class, according to senior
officials of the income-tax (I-T) department.
Well-heeled independent professionals, like chartered accountants, doctors,
lawyers, big shopkeepers and wholesale traders make up the category of income
tax assessees who add to the number of people under the tax net but contribute
virtually nothing to the national exchequer.
Senior I-T officials are of the view that the cost to the department for
maintaining these files would probably exceed the tax collections from this
category.
While even the figure of 3.5 crore income tax assesses is considered small for
the size of India's urban population, the fact that the number of effective tax
payers is less than half this number makes matters even worse for resource
mobilisation.
Independent professionals and traders with lavish lifestyles are reported to be
filing tax returns that reflect incomes ranging from a mere Rs 1.5 to Rs 5 lakh
a year. The big cars that they use are bought in the names of business entities.
"These assesses have been showing withdrawals from their bank accounts of a
paltry Rs 10,000 or so to run their monthly expenses, which just doesn't make
any sense," a senior official said.
Several big retail showroom owners in the Capital are reported to be showing
losses on their accounts books. The financial figures indicate that the
business
should have been shut down as the premises would bring in a huge rent but this
is not happening either, an official pointed out.
Senior officials say there has to be a culture of tax compliance that is
missing in India. While tax evasion is widespread, the I-T department does not
have enough manpower or resources to chase all the dodgers and make them cough
up the due amounts. Since the black money transactions take place in cash it is
difficult to track them down. A single assessing officer could be burdened with
as many as 10,000 files and it is difficult for him or her to examine all of
them in minute detail.
The extent of tax evasion is evident from the fact that when the investigation
wing of the I-T department conducts raids on the premises of suspected tax
dodgers, the income declarations result in tax collections of as much as Rs 100
crore.
In fact a Rs 5-10 crore collection is quite common, a senior official said.
According to official figures released on Wednesday, corporate tax collections
at Rs 2,78,411 crore, accounted for as much as 83 per cent of the total direct
tax collections of Rs 3,36,117 crore during April-February of this fiscal.
The figure show that while direct tax collections grew by 21 per cent during
this period, corporate tax went up by 24 per cent. Personal income tax
increased
by 15 per cent to touch Rs 1,12114 crore, which was mainly from the salaried
class.
