Tax evasion is due to faulty
system of taxation policies and corrupt practices. Black Money
generation is very high as people prefer cash transactions which
provides scope for evasion of taxes. Evasion is rampant in land deals
and high value purchases of gold,silver and diamonds. The very fact that
only 43000 persons have crossed the One crore limit of earnings as per
the tax returns filed is a farce and any average human being in Mumbai
itself will not vouch for this figure. The major lacunae in the system
is to track the transactions in cash. If there is a ban on cash
transactions above Rs 5000, and if all transactions above Rs 5000 are
tracked by insisting on aadhar Cards, or PAN numbers and they are tied
to the persons' bank accounts, it would be possible over a period to
assess the exact number of persons evading tax and track the black money
to some extent.The self employed and many business establishments do
not issue any receipt against the purchases even if the amount exceeds
Rs 10000. The fact of the matter is that the willingness to fix the
problem is not there.
(This comment is in response to the article the menace of black money that appeared in ET)
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