Income tax is a crucial source of revenue for governments worldwide, and in India, it can reach up to 30% for high-income earners. For an individual earning around ₹50 lakhs annually—a significant income by indian standards—this means that approximately ₹10 lakhs is deducted as income tax.
This deduction leaves taxpayers with around ₹40 lakhs to manage their expenditures, savings, and investments. While such a contribution aids in nation-building, it is a substantial portion of an individual's earnings and often leaves them questioning the benefits received in return. Many feel that despite their contributions, they see minimal return in public services and quality infrastructure, raising a concern over the utility of their taxed income.
Once the taxpayer proceeds to spend their post-tax income, the burden of Goods and services Tax (GST) comes into play, adding another layer of expense. Major purchases, like cars, are subject to up to 28% GST and additional costs for road tax, toll tax, and GST on car insurance. Essentials such as health insurance also attract an 18% GST rate.
This heavy layering of taxes on various goods and services can feel overwhelming. Every expenditure—be it on food, travel, electronics, or medical supplies—is indirectly taxed, reducing purchasing power and compounding financial pressure on the average taxpayer. The impact is pronounced as many essential goods and services are not tax-exempt, making day-to-day life increasingly expensive.
Moreover, even after income and consumption taxes, any investments from an individual's savings—funds already taxed—come with additional tax burdens. Taxes such as Long-Term capital Gains (LTCG), Short-Term capital Gains (STCG), and the Securities Transaction Tax (STT) apply to gains from investments, alongside Tax Deducted at Source (TDS) on interest or dividend income.
When viewed cumulatively, these layered taxes make the tax system feel particularly challenging. Taxpayers often compare this situation to the benefits provided in countries with similar tax rates, such as the US and UK, where better healthcare, education, and infrastructure are more accessible. In contrast, indian taxpayers feel underserved, as the tax-paying population receives minimal direct benefits or incentives, despite being the primary contributors to the nation’s revenue, creating a sense of disenfranchisement among this minority.
This deduction leaves taxpayers with around ₹40 lakhs to manage their expenditures, savings, and investments. While such a contribution aids in nation-building, it is a substantial portion of an individual's earnings and often leaves them questioning the benefits received in return. Many feel that despite their contributions, they see minimal return in public services and quality infrastructure, raising a concern over the utility of their taxed income.
Once the taxpayer proceeds to spend their post-tax income, the burden of Goods and services Tax (GST) comes into play, adding another layer of expense. Major purchases, like cars, are subject to up to 28% GST and additional costs for road tax, toll tax, and GST on car insurance. Essentials such as health insurance also attract an 18% GST rate.
This heavy layering of taxes on various goods and services can feel overwhelming. Every expenditure—be it on food, travel, electronics, or medical supplies—is indirectly taxed, reducing purchasing power and compounding financial pressure on the average taxpayer. The impact is pronounced as many essential goods and services are not tax-exempt, making day-to-day life increasingly expensive.
Moreover, even after income and consumption taxes, any investments from an individual's savings—funds already taxed—come with additional tax burdens. Taxes such as Long-Term capital Gains (LTCG), Short-Term capital Gains (STCG), and the Securities Transaction Tax (STT) apply to gains from investments, alongside Tax Deducted at Source (TDS) on interest or dividend income.
When viewed cumulatively, these layered taxes make the tax system feel particularly challenging. Taxpayers often compare this situation to the benefits provided in countries with similar tax rates, such as the US and UK, where better healthcare, education, and infrastructure are more accessible. In contrast, indian taxpayers feel underserved, as the tax-paying population receives minimal direct benefits or incentives, despite being the primary contributors to the nation’s revenue, creating a sense of disenfranchisement among this minority.
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