India loses over $314 billion annually to tax evasion, including $314 billion from uncollected income taxes and $800 billion from corporate tax incentives. Tax evasion occurs through weak enforcement systems, corruption, complex laws, and methods like overstating expenses and underreporting income. While some large companies and trusts have been caught evading taxes, overall tax evasion remains a major problem as only about 36 million of India's 1.3 billion people pay income taxes. Efforts to curb evasion through new laws and whistleblower rewards have had limited success.

1. illegal act or practice of failing to
pay taxes which are owed by
individuals corporations or trusts
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2. Corporate level
• Tax evasion can occur in connection with income taxes, employment
taxes, sales and excise taxes, state, and local taxes.
• Providing false information to the I-T department about business
income or expenses.
• Deliberately underpaying taxes owed
India loses 14 trillion rupees ($314 billion) from
tax evasion annually and 800 billion rupees a year
because of corporate tax incentives ( eg. Tax
holiday)

3. Reasons & Methods
• Weak Surveillance System
• Rampant corruption in Tax Department
• Complicated tax law and filing mechanism
Overbilling of purchase of raw material
Dummy salary entries created
False petty expense entries ( person expenses as business expenses)
 Lobbying to government
Bribery of tax officials

4. • Baba Ramdev's trusts asked to pay 58 crores in taxes (1100 Crore
business empire)
• India detects ‘visa fraud and tax evasion’ in US Embassy school
• Vodafone
• Shell India
• Nokia
• HP
• Cadbury
Not in lakh, but in more than 1000 crores

5. Are We Responsible For It?
• YOUR PURCHASE
• VAT = WE DO NOT ASK FOR A BILL
• INCOME TAX
are you truly faithful in paying income tax?

6. In USA, tax evasion is a crime
shall be fined not more than $100,000 ($500,000 in the case of a
corporation), or imprisoned not more than 5 years, or both
In INDIA,
up to 3 times the amount of income concealed.
Tax evasion VS Tax Avoidance

7. • In India
Only 2 to 3 percent of Indians pay any income tax. (around 36
million people)
U.S., about 45 percent of the population pays taxes

9. GAAR
•
General Anti-Avoidance Rules, under the Finance Act
2012, to be added to the Indian Income Tax Act
• Motive to CURB TAX EVASION
• Applicable of GAAR to the financial year beginning April 1, 2015
Reward for reporting tax evasion
: 20% of the penalty realized.

10. News Coverage

11. News Coverage

13. SOLUTION
MEASURE
EXPLAIN
CONTROL