Reasons and Impact of Tax Evasion and Tax Avoidance

Abstract

The purpose of the research is to understand the impact of income tax evasion and avoidance. The scope of the study is to understand impact, reasons, and problems caused by tax evasion and tax avoidance in Pune city and is also focused towards the tax evasion system in India. For the purpose of this research I have selected 100 respondents out of which some are tax payers and some are not tax payers. Random Sampling method is being used. Tax evasion is something which is deliberate attempt of taxpayer to not paying tax, whereas Tax avoidance is something in which taxpayers reduces his tax liability of paying the tax in order to pay less tax. These two reasons affect the revenue of the government in India. Government has numerous policies and remedies to prevent these tax avoidances as well as tax evasion despite of which there are still reduction in development of economies growth. This study is to understand these problems and find a suitable suggestion on those problems to overcome them.