Stay Clean

This topic has many conflicting views. This article is meant to help. Those who agree. And especially those who disagree.

I write this article not from a place of moral superiority, but as a well wisher. Please take the below views in that context.

What do I mean by staying clean?

We, as Indians, have a culture of not abiding by the rules. Even as proud and patriotic Indians, we disregard the tax laws, the traffic laws, and everything where the law enforcement is weak.

Stats show that only 1.6% of India's population pay income tax. Even amongst those who pay, some of us underreport our income.

Reasons why we don't stay clean

I can empathize the causes behind such a culture. Here are the most common reasons.

1. Corruption:
   Why should we pay taxes when most of it just goes in the pockets of the corrupt politicians and babus!
2. The better alternative:
   It's better to give to charity rather than to the government. At least it will be put to good use.
3. Cost of living:
   With such high cost of living, we barely survive. We can't afford the high taxes.
4. Why should we only pay!
   98% don't pay income tax in India. Why should we pay taxes?
5. I don't want to be on the radar
   Those paying higher taxes are targeted by officials thinking that we are hiding something bigger.
6. Filing returns is a hassle!
   We are not CAs. All these laws and provisions, accounting, etc are a big hassle! We don't want to get into all of this trouble!
7. What do we get in return?
   We pay taxes. And what do we get in return. Harrassment from officials. No basic amenities. The developed countries provide social security. What do we get!
8. The taxes are so high!
   The taxes in Middle East is 0%. Singapore also max 22%, In India, the slab goes up to nearly 40%! What for!

Why should I stay clean?

1. Nation Building

Awareness of India's golden ages increases our pride about Bharat. Alas its not taught in schools! The Portuguese, Spanish, Dutch, French and British empires as well as the dominance of USA put together cover the past 500 years. India's dominance was over 1500 yrs of publicly recognized history. And well well beyond that if one thinks critically about mythology. The patriotic Indian in us wants to see India rise to former glory once again. It's our role to build our nation by being responsible citizens. What we pay, helps in nation building.

2. Good night's sleep

We evade taxes so that we have to pay less. That should make us richer. And we equate richness with happiness. Richness does lead to comforts, and it does help us in avoiding a lot of painful and stressful situations. However, it does not lead to happiness. Virtues have a much better co-relation with happiness. There is enough research to back this claim. Love, kindness, integrity, simplicity, stable headedness, excellence, forgiveness, etc will make you feel happier.
We shouldn't compromise integrity for short term illicit gains. Evading taxes is equivalent to stealing. Let's not droop so low!

3. Increased surveillance - Use of Big Data, AI and ML

It is now increasingly possible for the government to track cases of tax evasion. The days when one didn't pay taxes and didn't have to worry about the repercussions are nearing their fateful end.

4. Penalty extremely high

Did you know that penalty for evading income tax can be as high as 300% of the tax evaded! So, if you are in the 30% tax slab, and you deceitfully evaded taxes on an income of ₹10 Lacs. You will have to pay penalty of ₹9 Lacs in addition to tax of ₹3 Lacs. Also, the hassles, stress and cost of the litigation are a bonus. Why not chose to simply and honestly pay the dues!

5. Income tax authorities can open up assessment of past years too

Tax authorities have the power to open our case up to 3 year after the end of Assessment year.
In case the authorities have evidence of evasion of taxes on income of ₹50 Lacs or more, our case can be opened upto 10 years after the end of Assessment year!

6. Authorities can open up cases of closed ones too

Where tax evasion has been found in one case, the close relatives of the tax evader also come under the radar of the authorities. So, our loved ones may also have to bear the hassles for our misdoings

7. Law of Karma

As we sow, so shall we reap. Many of us don't fully believe this, so here are some questions which will give us direction.
Why are some people 'luckier' than others? Why is someone born in war torn nation, while some in a developed nation? Why is someone born rich and someone into a poor family? How is someone able to fluently talk a particular language even without having any exposure to it? The answers to these thought-provoking questions have their answers in spirituality. Law of Karma is very real. You get what you deserve. Karma does not necessarily fructify instantly, so it becomes harder for people to believe it. I can go on and on, but I guess I am not the right authority for talking about spirituality. It's best you learn it from an enlightened master.

8. Focus our energies in the right direction

Experts in every field realise that they will be richer, more successful and happier if they dedicatedly focus their energies on their selected area of competence. That is what it takes to get to a level of mastery. Let's not use our energies on planning how to evade, trying permutations, calculating consequences and probabilities of being caught, later building false arguments in case we are caught, fighting cases, and taking all the stress that comes along. Let's focus on growing!

Alternate perspectives to our reasons

Here are mind maps which will help destroy the logic we give to our greed and deceit so that we can progress towards being happier.

1. Corruption
   There are positive signs that the leakages of corruption are decreasing. x% of what I pay helps India. That is enough for me. I would rather focus on what's in my control.
2. The better alternative
   Let me not compromise on my integrity in the process of helping someone. I will happily give to charity from what remains after I have paid my dues.
3. Cost of living
   Starting financial year 2024, those with income upto ₹7 lacs annually have no taxes. The tax rates are also rationalized. I don't have to pay taxes until I start earning well.
4. Why should we only pay
   I am a leader. I will walk the right way even if I am a minority. Others will follow.
5. I don't want to be on the radar
   With faceless assessments, the mental harassment of tax officials is almost curbed. I am fearless considering I have done nothing wrong.
6. Filing returns is a hassle
   The system is now very simplified. Much of the gains are auto populated thanks to the AIS. Everything can be done digitally. And the systems are only improving. Refunds also come quickly.
7. What do I get in return
   I get the satisfaction of being an active and responsible part of India's growth story. Doing what is in my hands ethically and to the best of my abilities makes me happier.
8. The taxes are so high
   There was a time when income taxes went up to 97%. They have decreased substantially. Infact when I calculate, my effective tax rate are much lower than my slab of 30%. (Mine are just around 20% of total revenues). This is not a tax after all. It's my contribution for the nation.