Journal Press India^®

            This issue of Vision continues in its endeavor to stimulate discussion on topical issues pertaining to Goods and Services Tax (GST), financial inclusion, debate on the old vs. new regime of the Income Tax Act, 1961, tax implications on Startups and Unicorns in India and also includes issues like tax evasion, corporate misreporting, and enforcement constraints in developing nations. The issue begins with the ‘Perspective’ on fiscal gains from financial inclusion in Asian economies by Narasimha Murthy Kamakula. This study provides strong evidence of the fiscal gains from financial inclusion in Asian economies. The study reveals that a one standard deviation rise in financial inclusion increases the tax-to-GDP ratio by 1.31 percentage points. Further, the study underscores that a threshold effect of FII which equals to 0.647 indicates non-linear gains, suggesting that benefits intensify after a critical mass. Interestingly, high-income countries gain more, likely due to stronger institutional capacity or diminishing returns in low-income settings. The study also recommends that expanding digital infrastructure can help developing economies boost revenue, improve compliance, and modernize tax systems making financial inclusion a strategic level for fiscal strengthening.

            The paper by Isha Dasgupta investigates the political economy of taxation reform in India through an analysis of the federal dynamics underlying the implementation of two major fiscal policies—Value Added Tax (VAT) and Goods and Services Tax (GST). The analysis is deepened through a binary logit regression model, which affirms that political allegiance was the most significant determinant of early or delayed implementation, even over relevant economic indicators. The results emphasize the inseparability of fiscal federalism and political contestation in India’s reform trajectory, making a case for viewing taxation as a politically negotiated process.

            Prasad Bhat, Shruti Ganpule and Supreet Oberoi, in their research paper conduct a comparative analysis of income tax benefits on mutual fund investments under India’s old tax structure and new tax regime. It examines the impact of tax deductions, particularly under Section 80C and for Equity-Linked Savings Schemes (ELSS), versus the effects of lower tax slab rates in the new regime on investor behaviour and post-tax returns. The study finds that tax planning remains a significant driver in investment decisions. The old regime incentivized investments through deductions and favourable capital gains treatment, while the new regime’s simplified structure may reduce the attractiveness of mutual funds for some investors. The paper concludes with policy implications for investors, asset management companies, and regulators, emphasizing the need for adaptive strategies, enhanced investor education, and continuous monitoring of the evolving tax landscape to ensure effective wealth creation through mutual funds. An intriguing paper by Arti Sharma and Rajat Kumar explores the grey areas like tax evasion, corporate misreporting, and enforcement constraints in two developing nations. This paper examines the adverse impacts of tax evasion on the efficiency and expansion of the economy, with a particular emphasis on India. Further, the paper underscores that tax evasion presents a substantial menace to the economic prosperity and advancement of a nation. Hence, tackling tax evasion is crucial for promoting sustained economic development and prosperity in India and other countries grappling with similar issues. A natural experiment of a developing country like Ecuador provides a clear paradigm and sufficient empirical evidence to explain how and why this might happen. This adjustment results in a $9.60 increase in taxes collected for every $1 discrepancy corrected, highlighting the potential of data-driven enforcement in boosting compliance and tax revenue.

            Amidst the global trade disruptions, a pertinent issue of revisiting double taxation avoidance agreements: normative analysis framework for equitable taxation has been dealt with by Karanam Kavitha, Roopa H. S. and Kiran M where the author delves into the conceptual framework of tax treaties, with a particular emphasis on the Indian context. The study examines the provisions, benefits, and challenges associated with DTAAs, as well as their influence on international tax planning and the ways in which multinational enterprises utilize these treaties. Additionally, it addresses recent advancements in preventing treaty abuse, including the effects of the Multilateral Instrument and India’s General Anti-Avoidance Rules. The study proposes a normative framework to serve as a moral and developmental guide for treaty design.

            The paper by Preetham D. further investigates how taxpayers perceive the old and the new tax regime under the Income Tax Act, 1961 regimes by analysing data from 200 respondents across Karnataka. The findings of the study reveal that the younger individuals and those with limited tax-saving investments tend to prefer the new regime for its simplicity and higher liquidity, while older, salaried individuals and those with long-term financial commitments favour the old regime due to its tax planning advantages. The research underscores the importance of clear communication to help taxpayers make informed choices, and calls on policymakers to ensure both regimes are equally understood to diverse financial circumstances. Startups and Unicorns are buzz words among young entrepreneurs today.

            An apt paper on tax implications of Startups in Unicorns in India by Yukti Agarwal explore the historical development of India’s taxes on startups and unicorns and analyse their effectiveness in promoting sustainable growth and investor paradigm shift. Further, the paper also examines the implication of direct and indirect taxes, the importance of the CBDT startup cell, and the impact of the recent reforms like the scrapping of angel tax in 2023. The author suggests ways towards creating a better startup-friendly tax regime through a comparison with countries like Singapore and the United States. This issue of VISION continues in its endeavour to bring relevant issues of taxation to the fore and stimulate discussion so as to provide useful insights for robust tax administration and fiscal policy making. We hope our readers find it interesting and insightful. The Editorial team of VISION expresses its warm gratitude to all contributors for stimulating discussion on topical issues in taxation area and wishes its authors, reviewers, and readers a very happy, healthy and prosperous 2026!

Dr. Sameer Lama
Editor-in-chief