so the finance minister said...

by Guest Fri Apr 12, 2013 11:30 am

...in his budget speech that income tax assesment was fully computerized and that there were very slim chances of tax evasion? all the computerization has done is to repeatedly suggest that files of honest tax payers like me be put up for "scrutiny" time and again. i am a honest tax payer compared to these whales:

http://economictimes.indiatimes.com/news/economy/finance/diamond-houses-local-traders-realtors-and-petty-assistants-come-together-to-evade-tax/articleshow/19502226.cms

i now suspect that black money in the economy (as a ration to all the money) is at a record high in our post-independence history.

by Hellsangel Fri Apr 12, 2013 11:50 am

It is the same problem in the US. But not at such a scale. Cash transactions are hard to track. In India, even major transactions happen with oodles of cash.

by Marathadi-Saamiyaar Fri Apr 12, 2013 12:16 pm

Hellsangel wrote:It is the same problem in the US. But not at such a scale. Cash transactions are hard to track. In India, even major transactions happen with oodles of cash.

The underground economy is around 8% in US. Even that, the IRS can track down if it so desires. But, the cost and effort are not worth the return, besides, it is spread uniformly across the population - accountants, baby sitters, chinese take outs, Indian groceries, Taxi guys, tips hooters waitresses get and the Pole dancers tips, etc...

In India the real estate and Jewelry are the ultimate destination of black money. So, the govt can really control if it wants to - except, those are also the areas most babus and politicians area actively involved.

by Guest Fri Apr 12, 2013 1:55 pm

Hellsangel wrote:Cash transactions are hard to track.

yes.

In India, even major transactions happen with oodles of cash.

yes i believe so now after this article. earlier i was sceptical because of the following reasons:

(i) IT dept. has the power to attach your property if the transaction value is less then that determined by the registrar;
(ii) IT assessment is computerized;
(iii) PAN number is required for all bank transactions exceeding a certain amount;
(iv) indirect taxes evasions is pretty much impossible now because the departments are smarter and because of VAT and service tax;
(v) tax slab in india is at par with the rest of the world and there is little incentive to evade for small fishes like me. avoidance is a better recourse.

but, in the end, all my beliefs went for a toss today.

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