Decoding 15th FC's estimate of mismatch in two sets of salary income data

The Commission asserts salary incomes shown by taxpayers are understated by 50%, finds scope to extract more direct tax by chasing evasion without changing tax rates; experts aren't convinced

Through a tucked away piece of calculation in the fat (1,427-page) report of the 15th Finance Commission, its chairman N K Singh has again fanned the topic of tax evasion. 

The Commission has matched the data on income tax returns for salaries with comparable numbers in National Accounts Statistics. It reaches the conclusion that salary incomes shown by taxpayers are understated by almost 50 per cent. It adds a caveat that the difference is not as stark as the data shows, yet argues that there is scope for unexplained large differences between the two data sets. “..considering that we have