Yes, its that time of the year when everyone is worried about tax. As first time tax-payers, we (until recently students) are also worried about the amount of tax that needs to be paid. We had a good discussion on this which I want to share here.
Ravi: Hi guys. Do you know that I need not pay a single rupee as tax this year?
Sunny: You are joking, Aren't you?. You are earning 3.5lakhs this year. So even after 1 lakh exemption under section 80C, you need to pay tax on remaining 1 lakh.
Ravi: HRA and Medical reimbursements are also exempted from tax. Since I am declaring rent of Rs10,000 per month, my income falls below 1.5 lakh limit.
Sunny: Rent is only around Rs2,500. Isn't it?
Ravi: But I can get rent receipts declaring that I am paying a rent of Rs10,000 . Come on, its quite common these days. Its a public secret that people supplying fake medical bills, rent receipts are in good demand.
Sunny: Aren't you encouraging such persons? You are justifying tax evasion since it is rampant. Is that what you are trying to say?
Ravi: Whats the purpose of paying tax? It goes into politician pockets. If you pay hundred rupees, hardly fifty rupees is put to proper usage. So I can instead give it to a charitable trust and actually do more good.
Sunny: Government has started several innovative projects like NREGP, JNNURM, NRHM, Golden Quadrilateral which no trust does. Many of them are getting curtailed due to shortage of funds. This situation is forcing the government to increase revenue through surcharges and widening the tax net. I agree that there is a lot of scope for improvement. We should help the government by plugging loopholes rather than trying to make unfair use of them. One can't be sure that trusts make proper use of money. Also how many tax evaders actually are donating money to trusts. And how many of them are just giving it as an excuse for tax evasion. If this form of government is inefficient, then the blame lies with us. How many of us got registered as voters? How many of them are voting? And how many of them are actually exercising it properly by going through candidates background and parties manifestoes?
Ravi: We cant change this system in short term. As long as the system is inefficient, there is no use paying tax. I don't know what other tax evaders do. But this is what I want to do. I shall give the money to a needful person, mentor him and free him from depending on government's assistance.
Sunny: What if someone loots you and justifies it by saying that the money looted is distributed to the poor. What if a corrupt official says that he is only using the money to improve someone's lives. Tax evasion is also similar to that. At least we benefited from the government by way of lower fees, jobs due to tax concessions to IT and Electronics industries. We are earning far higher salaries than national average. We have sufficient financial capacity to actually pay the tax and also spare some amount to help someone. By the way, we are so called educated citizens of India.
Ravi: Truly speaking, I realize now that I am only trying to find some reasons for justifying tax evasion. I didn't realize how severe a problem it is. Since everyone is doing it, it didn't appear to me as such a big scam.
Sunny: We might have done several mistakes until now or even doing still. But lets not do a mistake knowingly. Then, there is no difference between us and fraudsters.
(End of Conversation)
After Mumbai attacks, many started justifying tax evasion on the pretext that the government wasn't able to protect them. But they don't realize the difficulties in running a government considering its vast responsibilities. Yes, there are several problems plaguing it. There are also several solutions. One needs to carefully chose the proper one which improves existing one rather than trying to destroy it.
No comments:
Post a Comment