The taxation system of India is a complete mess and it increases the cost of compliance for individuals and businesses. The income tax laws of India are full of exemptions with significantly higher tax rates that promote tax evasion due to lack of clear rules. The government can increase existing tax slabs and reduce exemptions and this can also increase tax compliance with overall increase in tax collection
Similarly, many corporates are still using old taxation system with several exemptions. The government should accelerate the shift towards the simplified tax rate of 25.2%, which has no exemptions
It would be a big mistake if we omit discussing about the capital gain tax which are inconsistent across asset classes and sometimes point towards serious lack of competence in those officials framing these taxation rules.
We hope that the government understands that these complex web of taxation laws which has been created over last several years often results in wastage of time of citizens in understanding these rules and often breeds corruption
