Pay tax not just to relax, as the IT (Income Tax) department says, but also to contribute to nation building as part of our soon-to be fundamental duty.
The finance ministry plans to propose that paying tax be made a fundamental duty, hoping the move will increase compliance in a country where less than 3% pay tax.
A cabinet note could be moved soon. “There are various fundamental duties laid down for citizens in the constitution...We are looking at including paying taxes the list in the same way,” a finance ministry official said. .
India’s tax-to-GDP (Gross Domestic Production) ratio, already one of the lowest among its peers, fell to 10.1 per cent in 2011-12 from a high of 11.9 per cent in 2007-08. This is largely blamed on the low tax base perforated by multiple tax exemptions.
The tax experts say this is a symbolic gesture aimed at increasing awareness about why paying taxes is necessary, like so many other fundamental duties.
Ten fundamental duties were originally included in the constitution through the 42-nd amendment, 1976. Subsequently, the 86 - th Constitution Amendment Act, 2002, added one more - it made it a duty of every parent to provide education opportunities to his child.
Fundamental duties are more in the nature of moral obligations of citizens to help promote a spirit of patriotism & to uphold the unity of India. They can not be enforced legally.
Mr. Sunil Jain, Partner, Jyoti Sagar and Assosiates said, ''Fundamental duties are not a legal obligation. But there is a social responsibility with them. There is no legal remedy available but law abiding citizens will abide with them''
The finance ministry is now proposing an amendment to make paying taxes for nation building, hoping to build on its earlier initiative to increase awareness about taxes by including a relevant chapter in school curriculum.
The national council of educational research and training (NCERT) has introduced a wide variety of topics, including history of taxation, rationale for taxes, how the government raises revenues & spends as part of the curriculum taught to the children between 10 to 18 age group.
According to the information provided by the government to Parliament, India has about 33.73 million income taxpayers, , which means that less than 3% of the population pays taxes. Income tax experts say tax compliance is predominantly a function of rate of tax, probability of detection & penalty rates, and only effective enforcement can address the rampant tax evasion in India.
Src: ET
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