Tax evasion

illegal act or practice of failing to pay taxes which are owed by individuals corporations or trusts

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• 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)

Corporate level

• Weak Surveillance System• Rampant corruption in Tax Department• Complicated tax law and filing mechanism

Overbilling of purchase of raw materialDummy salary entries created False petty expense entries ( person expenses as business expenses) Lobbying to governmentBribery of tax officials

Reasons & Methods

• 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

• YOUR PURCHASE

• VAT = WE DO NOT ASK FOR A BILL

• INCOME TAX are you truly faithful in paying income tax?

Are We Responsible For It?

In USA, tax evasion is a crimeshall 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

• 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

• 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.

GAAR

News Coverage

News Coverage

SOLUTION

MEASURE EXPLAIN CONTROL