New Delhi, Apr 14 (PTI) Flagging alleged large-scale tax avoidance among India's most affluent, the Congress on Monday alleged the Modi government has ended the sanctity of the tax administration system, giving a message that any evasion can be overlooked with a hefty donation to the BJP.

Congress General Secretary (Communications) Jairam Ramesh cited a recent paper by Dr Ram Singh, one of India's leading economists and Director of the prestigious Delhi School of Economics, to press his argument.

He said the paper found large-scale tax avoidance among India's most affluent.

Elaborating on the key takeaways from the paper, Ramesh said the wealthier a household, the lesser the income reported related to the wealth.

"For the bottom 10% of families, total reported income amounts to more than 188% of the family wealth. For the top 0.1% of families, total reported income is a mere 2% of the family wealth," he said, citing the paper.

Tax avoidance is an important factor behind the relatively small value of the reported income-wealth ratio for extremely wealthy families, he said.

In effect, India's Income Tax system is regressive since the rich are able to get away without paying taxes by evading them, the Congress leader said citing the paper.

"The Modi government has done absolutely nothing to change the reality of this large scale tax avoidance. Instead, with its extortion of electoral bond donations from individuals and companies and politicization of raids to intimidate the opposition, the Modi Government has ended whatever sanctity the tax administration system in India enjoyed," Ramesh claimed.

"The message, implicit and explicit, that has gone out is that with a hefty donation to the BJP's campaign coffers, evasion of any scale can be overlooked," he said in his post on X and shared the paper. PTI ASK TIR TIR

Tax administration integrity undermined as political donations may enable widespread tax avoidance to go unchecked. Allegations assert that political donations and politicized enforcement have undermined tax administration sanctity, enabling large-scale tax avoidance by the wealthiest. An empirical paper cited reports a pronounced gap between reported income and household wealth at the top, which is attributed largely to avoidance, producing a regressive effect in practice as the affluent under-report income relative to wealth.