What about the citizens who do not intend to evade the tax? What about the circumstances that face the taxpayers and prevent them paying on time, such as illness or technical problems in their computers?

Understanding Taxpayers Behavior

In India, tax compliance has been very low and was estimated to be around 36% in 2017. Indian government had brought in a lot of changes in the tax norms and policies in order to increase the tax compliance.

A provision was made allowing the tax officials to enter any premise and seek any information that is required. This has come in the wake of increasing allegations that black money is being hoarded in the non-government charitable organization post demonetization. These measures give a higher autonomy to the tax officials and increase the chance of a tax evader being caught. Since the likelihood of getting caught increases, the cost of evading taxes become higher thus prompting the taxpayers not to evade taxes
It has been proven that the deterrence policy has an influence on the non-compliant taxpayers’ behaviour. However, threatening them by raising extra fines does not always solve the problem.

What about the citizens who do not intend to evade the tax? What about the circumstances that face the taxpayers and prevent them paying on time, such as illness or technical problems in their computers?