An Empirical Study on the Influence of Tax Litercy and Tax Attitude on the Compliance Behaviour of Self Earning Individuals in Bengaluru

Abstract

ABSTRACT newlineIt is a well-known fact that the rate of tax compliance is low in India, with a small proportion newlineof all individual taxpayers in the organized and unorganized sector filing tax returns. The newlineprimary focus of the government has also been to improve the tax compliance levels. The newlineBoard of Direct Taxes additionally called for concentrating on the requirement for change in newlinethe attitude of individuals everywhere to make good on the due regulatory obligations inside newlinethe recommended time. However, with an increase in enforcement powers, trust in newlinegovernment and tax authorities goes down, and there is a growing tendency for individuals to newlinebe dishonest in reporting their income on tax returns. Therefore, this study is primarily aimed newlineat the study of tax literacy levels of the individuals and the attitude of the tax payers towards newlinetax systems and procedures. newlineThe data has been gathered from 700 respondents with the help of a well-structured and newlineorganized questionnaire. Data analysis has been done using statistical tools such as newlinedescriptive Mean, ANOVA, T tests, Chi-Square test and SEM analysis along with newlineconfirmatory factor analysis and regression analysis. newlineThe empirical results show that the tax literacy levels are low. The attitude of the tax payers newlinetowards the government and the statute is negative and the respondents carry a strong newlinenegative attitude towards tax systems which is strongly influenced by various factors such as newlinepeer groups influence, fear of being caught for non-disclosure, rate of corruption in the nation newlineand so on. Further, it is also found that the tax literacy and attitude towards tax has a newlinesignificant influence on the tax compliance levels of the tax payers. These reasons can be newlineattributed to the low levels of compliance in the country. Therefore, it is recommended that newlinethe government takes efforts in boosting the confidence of the tax payers in the government newlineand the statute. It is also recommended to improve the tax knowledge of the tax payers so that newlinethe people willingly comply with the tax payments and adhere to the Act. It is generally seen newlinethat people in mostly developed nations of the world do not detest paying taxes. One of the newlinemain reasons being that the money is well utilized for the welfare of the masses. India too can newlinebecome a higher tax compliant nation if the menace of tax illiteracy and the poor attitude of newlinethe tax payers is dealt with appropriately. newline