Abstract

Taxation is a vital part for the growth of national economic, and infrastructure development. Tax evasion encompasses any behavior deemed immoral or unlawful that the tax authorities cannot defend for whatever reason. Because so much tax has been evaded through illegal ways, national income has decreased, which has resulted in the creation of illegal funds that endanger the nation's economy and obstruct its expansion. Direct tax evasion in India poses a significant challenge for the country's finance department. It is a complicated kind of white-collar crime, despite ongoing tax reform in India. Widespread evasion undermines government income, resulting in economic and social upheaval. Socially, it erodes public trust in the government, economic inequality, and injustice. Central Board of Direct Tax is in charge of determining the precise tax due and amount owed by the assessor and levying penalties in the event of nonpayment. The goal of tax evasion is often to avoid paying taxes. Contrarily, tax avoidance describes a person's attempt to lawfully lesser his income tax liability; dodging income tax will result in fines and penalties. This research paper will encourage you to consider the provisional reforms that may lead to downsizing of tax evasion in India and this paper will let you consider the loopholes that leads to high tax avoidance and tax evasion.

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