A report on how much tax Indian citizens paid was published last month. To say that the results have shocked the govt, would be an understatement. As per the report, only six people in India, earning over INR 50 crore ($7.4 million) filed for returns during 2012-13!
This when exclusive party’s in the costliest hotels, destination weddings (famously known as Big Fat Indian Weddings) where not only family and friends are flown to exotic locations in private jets, but DJs / performers are also flown in from abroad – are a norm among the rich and famous Indians.
Credit Suisse Global Wealth Report has already stated that India has over 2,100 ultra-wealthy individuals whose net worth is above $50 million (INR 355 crore) and Forbes report stated that India has 84 billionaires. So where are these personalities when it comes to paying tax? Where do they disappear?
Mr. Hasmukh Adhia, revenue secretary recently told this to AFP news agency – “The people in the higher bracket are not paying the correct amount of taxes. This is a fact. We need to do something about it. We are taking a lot of enforcement action.”
So how do you catch those who are not paying the right amount of tax? Well, Govt of India has devised a novel way. Tax man is going to collect data from luxury car dealerships from across the country and check what cars you have been buying under your name or family member’s name or your company’s name. This data will help the tax man join the dots and figure out if you have been paying the right amount of tax or not.
On an average, every year we Indians deprive the govt of billions of dollars in taxes. Only 2.5% of the entire population (1.2+ billion) files their return, a high percentage of which files for nil return. Hopefully this new strategy will help the govt to nab the defaulters.
Note – Images above are for representation purpose only.