the complexity of the form is not the reason people avoid paying taxes - people don't pay taxes because they can get away with it.
This certainly is one of the reason behind hiding income. But majority of the middle class don't even file itr 1 form (for income below 2.5 lakhs per annum ). For filling an itr 1 form, people don't need to pay any tax.
Though people are not paying taxes but the money is being accounted and my point here is that of accountability.
However, if the income was recorded the analysis of stats could have been done more efficiently.
At least until Nov 2016, wouldn't this income have been cash given that cash transactions accounted for 95+% of transactions[1]? (Percentage by total amount would have been useful too but I couldn't find that stat.) If these were 'unaccounted' then demonetization would have caught that. But only 1% of banned currency wasn't deposited (as of Aug 2017) [2]. The initial estimates given were for about 20% to not show up [3]. That didn't turn out to be the case.
So while I'm sure there is unaccounted income, I'm not sure this is most of the income of a very large middle class.
[1] https://www.forbes.com/sites/wadeshepard/2016/12/14/inside-i...
[2]https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis...
[3] https://www.forbes.com/sites/wadeshepard/2016/12/10/indias-c...
There are many facets for accountability. And I don't think that any middle class person having more cash in hand while exchanging his cash could potentially prove that his money is accountable because there exist some form of money which he has given to some other person or may be has invested in some business.
My point is by totalling out just the amount of cash maybe 5-10k rupees the income cannot be accounted.
Yes, but your original point I was addressing wasn't about all the money you have but specifically income.
My point is that income is coming from some transactions and 95% of transactions were cash based pre Nov 2017. And only 1% of cash outstanding was unaccounted for after demonetization.
> My point is by totalling out just the amount of cash maybe 5-10k rupees the income cannot be accounted.
Sorry don't understand what this means.
But this is probably moot now.
Which religion/caste is getting freebies and reservation benefits ? I am not aware.
1. India does have very large middle class population and most of their income is unaccounted.
2. Majority of middle class Indians who belong to certain religion/caste hide their income so as to get many freebies and reservation benefits.
3. Very few rich individuals pay taxes and file correct income tax return. Government is very much responsible for this as filling a simple itr form consist of many different sections and people avoid getting into official paperwork.
4. Though poor people are given various subsidies on paper but because of lack of education they barely know all the scehmes running around them and politicians eat most of their money.
5. Longer judicial proceedings make it even more tough for the system to catch corrupt individuals and implement good policies.