What factors influence the individual’s behavior in engaging in income tax evasion? An investigation using SEM and fsQCA

Purpose The substantial rise in tax evasion raises concerns about its adverse impact on the tax system’s integrity. This article aims to empirically investigate the factors affecting income tax evasion behavior among individuals in India’s National Capital Region (NCR). Design/methodology/approach A cross-sectional design was applied to gather primary data from (N = 548) taxpayers using a “self-administered survey questionnaire.” The hybrid “partial least squares structural equation modeling (PLS-SEM) and fuzzy-set qualitative comparative analysis (fsQCA)” approach was applied to analyze the data. Findings This research presents a comprehensive model that explains 53.4% of the variance in behavioral intention and accounts for 51.4% in the actual behavior of individuals who participate in income tax evasion. The outcomes show that high tax burden, corruption and complexity of the tax system significantly influence behavioral intention. On the contrary, digitalization and tax morale insignificantly influence behavioral intention. Notably, behavioral intention is significantly associated with the actual behavior of individuals engaging in income tax evasion. Practical implications The outcomes offer valuable implications for practitioners, including policymakers, governments and tax authorities, to effectively curb income tax evasion behavior and help them make informed decisions. Originality/value The innovative research model enhances prevailing knowledge by providing empirical insights into the effect of income tax evasion behavior among individuals in India. This study also contributes methodologically by combining PLS (linear) and fsQCA (nonlinear) techniques, demonstrating that both methodologies offer a deeper comprehension of the factors affecting individual behavior to engage in income tax evasion.