| In today’s world, every government aims at maximizing the welfare of their country. Developed countries vouch for more power and money while the developing countries attempt to strengthen their economy which apparently requires sound infrastructure and efficient financial policies. A majority of Indians find the prevalent effective tax rates in the country to be very high, which is apparently a major contributory factor in tax evasion and generation of black money. According to a study made by Gupta & Gupta in this regard, when average tax rates have increased by 1%, the size of black economy as compared to white economy increases by 3.16%. The opinion of people of India is that high tax rates, corruption in public sector units, multiple tax rates and inefficient tax authorities are the catalyst of tax evasion. |