TAX COMPLIANCE
When P Chidhambaram was FM under United Front dispensation, he talked about lowering of tax rates citing Laffers curve which postulates lower the rate of tax better the compliance. He was proved right when for the first time direct tax collections exceeded Indirect tax collections. There were demands to impose expenditure taxation which is considered far more equitable than Income Tax which many people tend to avoid paying using the various tax shelters available. The Vijay Kelkar committee suggested to do away with many tax exemptions including those which are aimed at promoting investment and saving through his EET regime which is still gathering dust at the ministry. Earlier, to increase tax revenue for the Government, Raja Chelliah brought services within the ambit of goods for taxation. The multiplicty of taxation was avoided through a system of draw backs at every point of purchase ensuring only such value added component suffer at various stages. None the less, it is heartening to note that there are tax payers in india who have a high level of compliance.
It is reported in the media that AkshayKumar, the current heart throb of Bollywood has paid about 300 million as Advance tax which translates in to an annual income of about 1000 million for this extremely talented but largely underrated actor. Shah Rukh Khan the Badsha of tinsel town comes a close second. In olden days Tamil actor Kamal Hassan was awarded by the Income Tax department for filing returns and paying taxes on time. We can contrast this with the olden days of long list of IT defaultrs from Bolly wood and Kollywood which included the likes of Super Star Amitab Bachchan. These Actors deserve all our praise for being role models in tax compliance., Usually in Cine Industry( if one may call it so) large sums of unaccounted money is ploughed in. we can see contrats of Rajinikant getting paid close to 200 million for a movie wherein a group dancer settles for a palrty Rs.100 and Chickenbiryanai. It is also believed that underworld finances most of the movies. It is the usual trend for actors to get paid in black to avoid payment of tax. But this trend is slowly changing with the likes of Shah Rukh , Akshay Kumar and Kamal Hassan. Hats of to them
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