India has population of 117 Cr, Only 3 Cr people pay tax in india and majority

falls between tax bracket of 3 Lac to 5 Lac (Income bracket). As per some estimates
approx 26% people are BPL (Below Poverty Line) in India and 14% people earn less
then taxable income so we are left with approx 70 Cr people..Assuming average
family size of 5 and 1 earning member�3 Cr people who are paying tax are taking
care of 15 Cr people�Now we are left with 55 Cr people�Again assuming 1 member
feeding total 5 members so which implies 11 Cr people in India are falling under
Tax bracket but not paying Tax.

Question arises who are these people

1. Farmers/Agriculturist: India�s 40% people are dependent on farming sector i.e.

approx 47 Cr�Effectively out of 55Cr non tax paying population, 47 Cr are directly
or indirectly linked to farming�Now we understand that this community barely meet
their ends but its not true for 100% of community�Approx 30% Farming community is
rich, atleast Govt. can tax the Big Fishes�The biggest question is why govt is not
taxing them, Answer is very simple Politics.

2. Rest 8 Cr are linked to Business and other activites where Govt either does not
have any control or very minimal control to impose tax regulation. To give e.g. how
many of us take proper tax invoice from next door Kirana shop answer is none or
minimal..As per rule he has to give tax invoice for all transactions which is not
happening so indirectly we all are responsible for this situation.

Now only class on which Govt has full control is salaried class where Tax can be
deducted at source that is why this class in unfortunate becoz this class cannot
escape tax net.

In real sense, these 3 Cr tax payers are carrying the burden of rest 114 Cr
population..Which is one of the prime reason for very high Fiscal Deficit..If
everyone start paying Income Tax honestly then there is no reason, Govt has to
struggle for funds..

Another biggest disadvantage for salaried class is that they are paying double
tax�Suppose a person A fall in 30% tax bracket so out of 100 Rs he earned, he paid
30 Rs tax (For simplicity, i am excluding cess)�He is left with 70 Rs and pls note
salary is already taxed. Now he decides to buy a TV & other items for his family
which cost 61 Rs and he has to pay VAT @ 14% to buy these so he need to shell out 9
Rs VAT�

Now lets do total calculation, he has earned 100 Rs and he paid tax twice i.e. 30
Rs + 9 Rs = 39 Rs..So his net tax is 39% not 30 Rs becoz he paid double
tax�Effectively its double whammy for salaried class becoz of double taxation�In
many countries it is avoided by allowing tax payer to claim deduction on taxes paid
from already taxed salary.

To wipe off fiscal deficit, Govt shud think ways of increasing Tax Net by bringing
all the people earning above minimum threshold in Tax net and also take steps to
avoid double taxation so that tax payer community (Mostly middle class) can sigh
relief.