International Journal of Law

Authors
Karan Singh

Abstract
Taxes are the major source of revenue to the government. The concept of tax has a long history. Since the beginning of human civilization, the tax seems to have been imposed by the state in one form or the other. A tax on income was one such source added to the system of taxation. A ‘tax’ is not a voluntary payment or donation, but an enforced contribution exacted pursuant to legislative authority. Taxation plays a critical and pivotal role in the process of advancement and growth of any Country. It was William Pitt who introduced personal income taxation in England in 1799, as 'shield money' to finance for the war. The Income Tax Bill 1961 was prepared on the basis of the Prof. Nicholas Kaldor Committee’s recommendations. The Income Tax Act 1961 came into force on April 1, 1962. Tax evasion occurs when individuals deliberately fail to comply with their tax obligation. The resulting tax revenue loss may cause serious damage to the proper functioning of the public sector, threatening its capacity to finance its basic expenses. India is facing major problems like tax evasion, black money; the existence of parallel economy show the Indian taxation system requires some major reforms in future ahead to address all these problems. This study covers the overview of the effectiveness of Income tax law, tax evasion in India, delineating the number of factors responsive for income tax evasion and examining the possible remedies to reduce the problem of tax evasion.