Tax evation by service class is negligible unless you get paid part salary underhand, which I believe is common in small/medium Indian manufacturing unit.

The major tax evaders even now are business people, but its not that easy as before. As pointed out by TK, if reality sector is regulated it will close this as an venue for stashing black money. Now for loans banks check credit score that kind of ensures that you have the flow in white.

Febpreeth,
In the past, medium size companies like Architectural offices, Accountants office, Lawyer office can easily evade taxes by paying under the table. Now all these offices are now monitored by the IT dept.. They have to declare each and every income and expense and also have to send the PAN number of every employee . So this has significantly increased the tax base. Before only govt. employees were paying tax. Now many service sector have to pay it.
The main source of revenue to IT dept now is :
1. Personal income tax (public and private).
2. Each and every invoice in the service sector (12.36 % for all invoices raised).
3. All materials used in private projects (any project other than a house) has to pay sales tax.
4. Corporate income tax. Now all corporates have to pay tax.

Murali The Krishna

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I am a Gents and not a Ladies.

You are aware that they still have Chartered Accountants, right? I heard the stories where these CAs charge a set sum to help evade taxes for the corporations and traders alike, and audit accordingly. That's for the corporation taxes. Top it all, Income tax department is no messiah either.

I worked with small companies (15 -25 employees) to the large ones (1000+) and nowhere did I noticed the under the table payment of salaries.

It will be a long time before things change on the ground level vis-a-vis taxes, and how the paid taxes are 100% applied towards welfare of masses, i.e. Govt. schools, libraries, roads, policing, public amenities, etc. Delhi is the prime example of how wrong the things are.

Anyhow! I think we digressed. This is not the crux of the topic. But, I think it does help people who would like to return to India for good.

Today I had gone to RTO for collecting my RC and parked my car in parking. The attendant charged 10/- meant for commercial vehicle and when I countered him he paid 5/- back. So, the learning which I kind of forgot was that double check what you need to pay .

Good. Looks like Chandigargh is really cheap (could guess it from the comparitively low wages offered there for IT people).
I live in a similar place. Low salaries (except for me) and dead cheap cost of living. I also pay Rs 5 for parking in downtown parking lot (Insome places Rs 10 or Rs 15 max).
In the capital city I live in, there is a very big IT park (30,000 people work in that campus). Some builders have built apartments there but not a lot of people buy those apartments. I was talking to a chief civil engr. and he told me that IT pay 30K for 2 year experience guy at the IT park and hence those guy's canot afford 50Lakh apartments. Luckily a lot of these apartments are bought by NRI's living in the Gulf and the America's.

Murali The Krishna !!!

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I am a Gents and not a Ladies.

On a related note, things are getting better in India these days.
The multi billion coal 'gate' scandal has been exposed and the coal allotment cancelled and now the Hon. Tamil Nadu CM, conviced by a bengaluru court after 18 YEAR long court case. Jayalalitha may be conviced anywhere inbetween 1-7 years. All this was unthinkable in the 1990's or the 2000's but now possible in the 2010's. All this is due to economic development which was a result of education, introduction of computers and hard work of the average citizen !

Jai Hind ! Mera Bharath Mahan !

Murali The Krishna

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I am a Gents and not a Ladies.

Ache Din Aane Wale Hain