How does the Gov find out about tax evasion

Well said.

amazing thoughts, man.....cheers. but i don't agree with the british raj, though u have a very valid point 2 make.

A recent report in The Hindustan Times deserves your attention !

India has 9,000 pages of I-T laws


India has the most complex income-tax (I-T) legislation in the world. With 9,000 pages of code dedicated to I-T, India beats the largest economy of the world, the US, in sheer volume of legislation, according to a PricewaterhouseCoopersWorld Bank study.

The study, Paying Taxes — The Global Picture, released on November 7, looked at tax regimes of several countries as part of a bigger study on doing business across the world.

One section compared the top 20 economies as measured by their gross domestic product (GDP) to the volume of I-T legislation. India (GDP rank 10) topped the list, followed by the UK (GDP rank 4) with 8,300 pages. Australia (GDP rank 13) was third with 7,750 pages, followed by Japan (GDP rank 2) with 7,200 pages. The US (GDP rank 1) came fifth with 5,100 pages of I-T legislation. Switzerland (GDP rank 17) has the least number of pages, just 300.

The study says that the high volume of legislation leads to thriving business by tax consultants.

The study also states that complicated procedures lead to tax evasion, often due to tax-payer’s ignorance.

“In India, the tax administration and procedures are bigger problem than the number of pages of legisla tion. For instance, the I-T department challenges returns filed as per directives sought from the department itself. This is not done anywhere else in the world,” said R. Jayaprakash, head of research at chartered accountants’ firm Haribhakti and Company.

India also features among the top 20 countries where I-T paid by the corporate sector is only a small part of total taxes paid by them. India ranks 12th on this list, which puts Sierra Leone, Burundi and Gambia in the top three spots.

“Higher indirect taxes lead to higher prices of products and the country becomes less competitive globally. However, India seems to be walking in the opposite direction with the introduction of new indirect taxes like service tax,” says Sidhhartha Sen, research director, Institute of Cost and Work’s Accountants of India.

mr. sudhir gupta, great piece of writing, am myself working 2 become a tax consultant (i've just started,yaar) ...& i agree with everything u've said, computation of income tax is mind-boggling piece of work and for that v do make money, but why shouldn't v, u know the kind of stuff v need 2 study, research and be updated abt??? . v EARN our money.

A real western perspective of our current chest thumping !



India the Superpower? Think again
India should put aside pride about its growing economy and concentrate on improving the lives of average citizens, argues Fortune's Cait Murphy.

By Cait Murphy, Fortune assistant managing editor
February 9 2007: 12:29 PM EST

NEW YORK (Fortune) -- Plug in the words "India" and "superpower" into an Internet search engine and it's happy to oblige - with 1.3 million hits. I confess that I did not check each one, but I suspect that almost all of these entries date from the last couple of years.

This is understandable. For the first time ever, India has posted four straight years of 8 percent growth; since it cracked open its economy in 1991, it has averaged growth of 6 percent a year - not in the same league as China, but twice the derisory "Hindu rate of growth" that had marked the first 45 years of independence.

India has gone nuclear, and even gotten the United States to accept that status. Its movies are crossing over to become international hits. The recent $11.3 billion takeover of Corus by Mumbai-based Tata Steel was the biggest acquisition ever by an Indian firm.


No wonder the idea of India as the next superpower is fast becoming conventional wisdom. "Our Time is Now," asserts The Times of India. And in an October survey by the Chicago Council on World Affairs, Indians said they saw their country as the second most influential in the world.


Sorry: India is not a superpower, and in fact, that is probably the wrong ambition for it, anyway. Why? Let me answer in the form of some statistics.


• 47 percent of Indian children under the age of five are either malnourished or stunted.
• The adult literacy rate is 61 percent (behind Rwanda and barely ahead of Sudan). Even this is probably overstated, as people are deemed literate who can do little more than sign their name.
• Only 10 percent of the entire Indian labor force works in the formal economy; of these fewer than half are in the private sector.
• The enrollment of six-to-15-year-olds in school has actually declined in the last year. About 40 million children who are supposed to be in school are not.
• About a fifth of the population is chronically hungry; about half of the world's hungry live in India.
• More than a quarter of the India population lives on less than a dollar a day.
• India has more people with HIV than any other country.
(Sources: UNDP, Unicef, World Food Program; Edward Luce)
You get the idea.

The 2006 UN Human Development Report, which ranks countries according to a variety of measures of human health and welfare, placed India 126th out of 177 countries. India was only a few places ahead of rival Pakistan (134th) and hapless Cambodia (129) and behind such not-about-to-be-superpowers as Equatorial Guinea (120), and Tajikistan (122).

As these and other numbers suggest, Indian triumphalism (a notable 126,000 hits on Google) is not only premature, it is misguided. Yes, growth has been brisk, and of course growth is necessary to make a dent in poverty. But as Edward Luce, author of the excellent, "In Spite of the Gods: The Strange Rise of Modern India," noted in a recent talk, poverty in India is not falling nearly as fast as its brisk rate of growth might anticipate.

The reason for this is that Indian growth has been capital-intensive, driven by the growth in high-value services such as IT. This is a good thing, but what it does not do is create stable and reasonably paid employment for not particularly skilled people - and this matters a lot, considering eight to 10 million Indians enter the labor force every year. Luce estimates that there are 7 million Indians working in the formal manufacturing sector in India - and 100 million in China.

India is awash in private equity
To look at it another way, the 1 million Indians working in IT account for less than one-half of one percent of the entire working population. This helps build reserves (and national confidence, and tax revenues) but is not the poverty buster that labor-intensive development is. As Prime Minister Singh told Luce, "Our biggest single problem is the lack of jobs for ordinary people."

The problem with India's self-proclaimed (and wildly premature) declaration of superpower status is that it reflects a complacency about both its present - which for many people is dire - and its future. Eight percent growth for four years is wonderful, but as the saying goes, past performance is no guarantee of future results. And India is not doing what it needs to in order to sustain this momentum.

Consider the postwar history of East and Southeast Asia. The comparison is appropriate because India started at about the same point, and has watched just about every country in the region get ahead of it on the economic curve. All these places developed by being relatively open to trade; by investing in primary and secondary education; and by building pretty decent infrastructure (not only roads and ports, but health clinics and water supplies). India has begun to embrace one leg of this triangle - freer trade.

Wireless Wonder: India's Sunil Mittal

Even here, though, many of the worst features of the swadeshi ("self-reliance") era remain intact, including an unreformed state banking sector; labor regulations that actively discourage hiring; abstruse land laws (and consequent lack of land titles); misshapen subsidies that hurt the poor; and corruption that is broad, deep and ubiquitous. Nothing useful is being done about any of this.

As for the other two legs of this development triangle - education and infrastructure - these are still badly broken. About a third of teachers fail to show up on any given day (and, of course, are unsackable); the supply of both water and power is expensive and unreliable.

These facts of life too often go unremarked in the current euphoria about the state of the nation. "We no longer discuss the future of India," Commerce Minister Kamal Nath told the Financial Times in a typical comment. "The future is India."

Hubris, of course, is the stuff of politics everywhere. But the future will not belong to India unless it takes action to embrace it, and that means more than high-profile vanity projects like putting a man on the moon or building the world¹s tallest tower. It means showing that the world's largest democracy can deliver real progress to the hundreds of millions who have never used the phone, much less the Internet. And in important ways, that just isn't happening.

India has many reasons to be proud, but considering it remains a world leader in hunger, stunting and HIV, its waxing self-satisfaction seems sadly beside the point.

Hello to all the members of this forum.

sudhir gupta ji, if people are questioning our economy, IMHO, it is because we are doing something right and hurting these buggers down there.

For instance, when the rate of growth was down it was the derisory "Hindu rate of growth" and when the ROG is up, it is suddenly not the "Hindu rate of growth" which is climbin'. Who worked for it? Aliens or pakis

Report says: The adult literacy rate is 61 percent. I ask what is the LITERACY rate(kids & adults)? It is about a decent 75-78%. Why choose only adult literacy rate? Because it shows our 'bad' side. Choosing and picking news only to badmouth us.

Another one, More than a quarter of the India population lives on less than a dollar a day. A dollar (Rs 45-48) can buy you two meals/day atleast. While in college @ Kolkatta, it brought me 3 meals/day just 2 years back and probably still can. Yeah, it won't buy you a McD burger, though. Keep this in mind when you read about 'chronically hungry' and a different scenario appears.

I concede that our media asses are tooting their horns too soon with 'India Poised'(ToI) and India superpower sorta news but look around and you'll see where we are in short space of time. And we need such biased dicks (our Indian journalists included too) to make us even more determined to grind their 5-inch long Pinocchio noses (with all that lying, 5 inch is gettable) into dust and move ahead of everybody at all costs.

No ill-will towards you, Sudhir. My 0.002 shares

"When you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal, not in goods, but in favors - when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed." - Ayn Rand

The bottomline here remains same.....If u are a politican u always will go scot free....as there are various havala channels to send the money outside india..and than invest in the country again through countries like mauritius.....
Its the common men who suffers......the It guys keep a tab on your spending.....and only those are caught who makes crores of deal this days mostly....No It officers waste time on people from where he only gets few thousand that too after wasting a week on him rather than they try to earn lakhs..which is obviously done from ppl dealing in crores and showing the money(like big purchases,cars,real estate,clubs,show shinning)..after all unka bhi pet ka sawal hain..they have only little time in office....and as far as my knowledge most IT officers have plasma in their home..where else even the pm doesnt earn that much income......so its better learn the loopholes.....and chidabaram will tax on every single stuff ...dont be amused if u have to pay tax on air,laughter or walking on your legs........so its better earn more become nri and than invest in India