A V Rajwade, in his column, "What's the logic behind tax evasion?" (May 5) wonders why people evade taxes despite the poor marginal utility of the move to seek foreign banks to deposit their savings. Could there be some non-theoretical reasons?
When the wealth is earned through illicit means, taxpayers may find it difficult to explain the source of income to the authorities, though they might be willing to pay the tax. Second, they have more trust in the soundness and confidentiality retention of foreign banks.
Third, as a nation, we are prone to breaking the law. One reason for this is that our laws are either too rigid or too lax or too complex to understand. India's Income Tax Act is a complicated legislation, with many provisos and exceptions. Careful filing of returns does not guarantee there won't be any litigation.
Also, there is a perception that only a fraction of taxpayers' money is spent well by the government, the bulk lining the pockets of the authorities. So why squander hard-earned income?
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When the wealth is earned through illicit means, taxpayers may find it difficult to explain the source of income to the authorities, though they might be willing to pay the tax. Second, they have more trust in the soundness and confidentiality retention of foreign banks.
Third, as a nation, we are prone to breaking the law. One reason for this is that our laws are either too rigid or too lax or too complex to understand. India's Income Tax Act is a complicated legislation, with many provisos and exceptions. Careful filing of returns does not guarantee there won't be any litigation.
Also, there is a perception that only a fraction of taxpayers' money is spent well by the government, the bulk lining the pockets of the authorities. So why squander hard-earned income?
Y G Chouksey Pune
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number