NPR

Why Do So Few People Pay Income Tax In India?

In a country with a population of more than 1 billion people, just 27 million paid taxes last year. Many Indians see no clear link between paying taxes and provision of government services.

For Indians who are paid in cash, it can be easy to avoid tax payments. Source: Indranil Mukherjee

Late last year, India sought to force people with large amounts of cash stashed away to deposit it in bank accounts. It was a tax-collecting exercise to get people to disclose unreported wealth and pay up.

The government credits the move for a 12 percent increase in tax collections from the previous year.

Enlarging that base in no small thing in a country where only a tiny percentage of people actually pays income tax. India ranks 13th of 18 among its democratic peers within the G-20 countries when it comes to paying tax, according to the country's 2017 Economic Survey.

At a cavernous office complex in Gurgaon, Delhi's modern neighboring city, India's professionals are employed at corporate firms where tax compliance is high. That's in large part because taxes on the wages

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