Underground economy also known as black economy is
basically illegal or untaxed income. In India only a small proportion of people that is
less than 5% of population file their income tax return. Evading tax is common practice
among educated urban middle class, the same is a status symbol in rural in India. People
take pride in having a handsome income, lavish life style but not paying a single penny
as tax.While the attitude of common man is biggest contributor to the black economy,
even the legal system and government machinery is to blamed
equally.
In India people never ask for a cash memo or
invoice or any kind of receipt at grocery store, Gas station, taxi services, buying
medicine, road side eateries, Shopping for cloth etc. All these transaction don't exist
in the eyes of government and goes untaxed in the hands of receiver and
payer.
In almost all the markets transactions takes place
in cash, even in property market the dealer insist on making a sales deed at a price
much lower than market price just to save on government duty and transfer fees and to
avoid tax on income.
The Income tax department recovers
millions from any person or corporate house where they could raid with a small team of
executives.
That's the story of Indian underground
economy.
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