Review of Indian Tax System
Review of Indian Tax System
6. Incidence of Taxation
8. Narrow Base
The tax base is very narrow in India in the case of both direct and
indirect taxes. A planning commission estimate shows that only one
percent of working population comes under the preview of direct tax.
Contrary to the earlier phase, tax system has exhibited a good deal of
buoyancy in recent years. The tax revenue has been continuously
increasing along with an increase in national income. However, the
increase in tax revenue has not been adequate enough to meet the
growing requirements of the developing economy.
2. Efficiency:
Our tax system also falls short of the criterion of equity. Although
our direct taxes are highly progressive, undue reliance on indirect
taxes has more than counter-balanced that effect. Leaving
agricultural income out of the tax net has been a source of additional
inequity. Likewise, the proliferating unorganised industrial sector is
providing complete, tax haven.
4. Certainty: