Indian Journal of Finance

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Impact of Tax Knowledge, Tax Penalties, and E-Filing on Tax Compliance in India


Affiliations
1 Associate Professor, New Delhi Institute of Management, 50 & 60 (B&C), Mehrauli - Badarpur Road, Behind Batra Hospital, Tughlakabad Institutional Area, New Delhi, Delhi - 110 062, India
2 Professor, Prestige Institute of Management, Airport Road, D.D. Nagar, Deen Dayal Nagar, Gwalior - 474 020, Madhya Pradesh, India
3 Assistant Professor, Amity Business School, Amity University, Opposite Airport, Maharajpura, Gwalior - 474 005, Madhya Pradesh, India

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This study investigated the tax compliance behaviour of corporate taxpayers in India. Based on the existing literature, three determinants were employed to study the tax compliance behaviour : tax knowledge, tax penalties, and electronic filing. To examine the impact of these independent determinants on compliance (dependent variable) by taxpayers, we collected survey data from 247 corporate taxpayers with a net worth less than ` 100 crores in Delhi and NCR in India during the period from January – July 2019. Cronbach's alpha test and one - sample Kolmogorov – Smirnov test were used to check the reliability and normality of the data set, and a linear multiple regression model was used to test the hypotheses and check the relationship. The findings confirmed that tax penalties and electronic filing had a statistically significant influence on the corporate taxpayers’ tax compliance, while tax knowledge did not show a statistically significant relation with tax compliance. The results could provide insights into progressive tax policy tools and administration strategies to augment taxpayer compliance, which will increase the nation’s tax revenues. Further studies can be undertaken to understand the relationship of tax compliance with other determinants.

Keywords

Tax Compliance, Tax Knowledge, E-Filing Tax Evasion, Taxpayers.

JEL Classification Codes : C83, H20, H25, M40, G38.

Paper Submission Date : February 13, 2020 ; Paper sent back for Revision : October 7, 2020 ; Paper Acceptance Date : December 18, 2020 ; Paper Published Online : July 5, 2021.

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  • Impact of Tax Knowledge, Tax Penalties, and E-Filing on Tax Compliance in India

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Authors

Silky Vigg Kushwah
Associate Professor, New Delhi Institute of Management, 50 & 60 (B&C), Mehrauli - Badarpur Road, Behind Batra Hospital, Tughlakabad Institutional Area, New Delhi, Delhi - 110 062, India
Navita Nathani
Professor, Prestige Institute of Management, Airport Road, D.D. Nagar, Deen Dayal Nagar, Gwalior - 474 020, Madhya Pradesh, India
Manav Vigg
Assistant Professor, Amity Business School, Amity University, Opposite Airport, Maharajpura, Gwalior - 474 005, Madhya Pradesh, India

Abstract


This study investigated the tax compliance behaviour of corporate taxpayers in India. Based on the existing literature, three determinants were employed to study the tax compliance behaviour : tax knowledge, tax penalties, and electronic filing. To examine the impact of these independent determinants on compliance (dependent variable) by taxpayers, we collected survey data from 247 corporate taxpayers with a net worth less than ` 100 crores in Delhi and NCR in India during the period from January – July 2019. Cronbach's alpha test and one - sample Kolmogorov – Smirnov test were used to check the reliability and normality of the data set, and a linear multiple regression model was used to test the hypotheses and check the relationship. The findings confirmed that tax penalties and electronic filing had a statistically significant influence on the corporate taxpayers’ tax compliance, while tax knowledge did not show a statistically significant relation with tax compliance. The results could provide insights into progressive tax policy tools and administration strategies to augment taxpayer compliance, which will increase the nation’s tax revenues. Further studies can be undertaken to understand the relationship of tax compliance with other determinants.

Keywords


Tax Compliance, Tax Knowledge, E-Filing Tax Evasion, Taxpayers.

JEL Classification Codes : C83, H20, H25, M40, G38.

Paper Submission Date : February 13, 2020 ; Paper sent back for Revision : October 7, 2020 ; Paper Acceptance Date : December 18, 2020 ; Paper Published Online : July 5, 2021.


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DOI: https://doi.org/10.17010/ijf%2F2021%2Fv15i5-7%2F164493