Is tax evasion a serious problem?

Yes, tax evasion is a serious problem. In the Income-tax Act of 1961, under Chapter XXII, there are provisions for prosecution of people who indulge in tax evasion. Tax evasion is the main cause behind the problem of a very low tax base in India. You can read about the Black Money, Tax-Evasion & Tax-Avoidance in the given link.

In the 906 cases of tax evasion against exporters, between July 2017 to August 2020, the quantum of tax evasion was Rs 2,551.15 crore. 

Further readings:

1. Black Money: Definition, Sources & Measures to Curb Black Money. [UPSC Economy]
2. Double Taxation Avoidance Agreements (DTAA) – Countries Involved, Income Tax Provisions