We’ve all heard the saying: “In this world, nothing is certain except death and taxes.” But in India, while death is universal, taxes are not always fairly shared. With just over 8 crore individuals filing tax returns out of a population of over 140 crore, the question is not just “Are you paying taxes?” but “Are you paying your fair share?”
Let’s explore what being an honest taxpayer really means, why it matters, and how your role impacts the nation far beyond your bank account.
The Reality Check: India’s Tax Base Is Alarmingly Narrow
According to the Income Tax Department Of India , only about 6.7 crore individuals filed income tax returns (ITRs) for FY 2022–23. Out of these, only 1.2 crore actually paid income tax after deductions and exemptions. That’s less than 1% of India’s population contributing to direct taxes — the primary source for funding public infrastructure, education, healthcare, and national defense.
Compare this with countries like the U.S., where about 50–55% of the adult population pays income taxes. In India, the burden is disproportionately shouldered by a small segment of salaried professionals and compliant businesses.
What Experts Say About the Tax Culture
Renowned economist Raghuram Rajan once noted: “India has one of the lowest tax-to-GDP ratios among major economies. If we want Scandinavian-level public services, we must be willing to pay Scandinavian-level taxes.” ( The Hindu ,2021)
Nobel laureate Abhijit Banerjee emphasized that building a just and equal society requires a strong and fair tax system. In an interview with NDTV, he said: “People need to feel that taxes are being used effectively and that everyone especially the wealthy is contributing their share.”
Even PM Narendra Modi , in a 2020 address, urged citizens: “Only 1.5 crore people in a country of 130 crore pay income tax. This situation must change if we want a self-reliant India.”
What Makes You an Honest Taxpayer?
It’s not just about filing a return or paying what’s due. An honest taxpayer is someone who:
- Declares all sources of income – including rental, capital gains, freelancing, etc.
- Doesn’t fudge expenses or use fake deductions
- Pays taxes on time and files returns regularly
- Encourages others to comply, especially in business dealings
This honesty forms the foundation of a functioning state allowing governments to invest in schools, hospitals, roads, and digital infrastructure.
Why Your Contribution Matters
Many Indians justify tax evasion with the claim: “What do I get in return?” But that mindset overlooks a larger truth: taxes are not just a transaction — they are participation in nation-building.
It’s taxes that fund Free vaccination programs, Government schools and subsidies ,Road and rail infrastructure, Defense and national security, Welfare schemes for the underprivileged. By evading taxes, one not only shirks personal responsibility but also places an unfair burden on those who do comply.
The Flip Side: Honest Taxpayers Need Respect and Reform
To improve compliance, the system must also offer transparency, simplicity, and fairness. Quoting Arvind Subramanian, former Chief Economic Advisor: “If the state treats taxpayers like potential criminals, compliance will always be low. A respectful, responsive tax administration is essential.”
India has taken steps in this direction with faceless assessments, faster refunds, and digital filing systems — but more awareness and systemic trust are needed.
Be an honest taxpayer — for yourself, your children, and your country. It’s not just a financial duty. It’s a moral one.