Why So Few Indians Pay Income Tax: Opinion

Very few Indians pay income taxes. So, millions of them evade taxes and hide their incomes is the popular notion.

But this is a big myth. India has very few taxpayers not because millions of them are hiding their incomes and evading taxes. It is because India’s income tax structure is designed in a way that allows only for a small percentage of people to pay income tax.

Let us first understand who should pay income tax in India. According to the latest income tax rules laid out by the Finance Minister in her Union budget, only people earning more ...