Taxation Plan of India - We are paying 50% as tax
We never realize that we are paying more than 50% of our salary as tax to govt. every year in India. Yes, that may be surprising to you but that’s true.
Currently we are paying 30% tax on our salary as income tax and 2% of education cess tax. Then we pay 12 % as service tax on our spending and 4% - 12% of VAT on various consumable and non-consumable products. Apart from this we pay other taxes also like road tax, house tax, registration charges for vehicles and home and many others in our daily living. And even after paying all these taxes we cannot use any facility provided by government for free. We pay extra money as toll tax on various roads; we pay money in railways and roadways buses etc. If we have to pay again for everything then where is that money going.
One thing is sure that whatever tax government imposes on any businessman, he will directly forward that to consumers by increasing the prices of goods. If I can remind you the figures of tax payers in India then they only summed up to 10% or may be less of total Indian population. That means 10% of people are taking up the load and paying for 100% people. I am not an economist but I feel there is no proper taxation plan in India.
If we consider the upper class of earning people then no businessman is paying full tax on whatever he is selling and there is no trap to catch them. When VAT was introduced then it was said that it is for betterment of common man and they don’t have to pay tax on same products at various levels. But do you think it is properly implemented?
Now if we consider the so call poor people who are doing business then they are not paying single penny of tax to government. I am taking an example of a tea maker near to my place. Most of them are using domestic LPG for his burners and not purchasing it at commercial LPG rate. Can you believe he has a daily turnover of around Rs 10000? I can show the calculation:-
Number of kettle he distribute =70
Number to cups in each kettle1=15
Cost of each cup=Rs 3
Total money generated by distribution of tea= 70*15*3*2 (Twice a day)=6300
And total money he generate by selling tea on his shop must be around 3700
Now this guy is distributing his tea in various companies and almost all nearby offices. And if we calculate his annual turnover comes to 12*30*10000=3600000=36lacks. Thisi income is just from one shop as he had a small chain of his tea shop in city of Pune; I guess 4-5 branches.
Can you ever image how much one can save in just selling tea? And he is not paying anything to government for this income. Is government taking any steps to trap these small businessmen? No, because it will effect their vote bank. Same is the case of private busses and auto/taxi drivers. There are thousands, lacks of such people who are showing them below poverty line but they are earning much more then middle class people.
Today morning I read news of increasing the service tax. There is always a slogan by Indian common man that “Dal- roti kha kar kaam chalate hain” (We are surviving in having just dal and roti). This slogan is no longer true for them as cost of dal is now increased more than 50 rupees a kg. And cost of other consumable goods has also increased. If we see the growth and salary of people in India then cost of various goods are now already doubled or triples (we can take example of pulses, petrol and even salt). Is this the case with the salaried person? Is there salaries are also tripled now? No, but they have no other option but to bear with this.
Government is showing growth rate as 8% every year but I am worried they are going down by double of this figure every year. I am worried in thinking of situation of India 10 years down the line that how common man will survive.
This is my suggestion to government that instead of thinking of various issues regarding the development of country and setting new industries in India we should first think of basic problems of this country. Government should think before selling land of poor farmers and restricted area land to various industrialists and set up SEZ to fulfill there needs and generate money out of that. No country can because economically fit if basic needs of citizens are not fulfilled.
Currently we are paying 30% tax on our salary as income tax and 2% of education cess tax. Then we pay 12 % as service tax on our spending and 4% - 12% of VAT on various consumable and non-consumable products. Apart from this we pay other taxes also like road tax, house tax, registration charges for vehicles and home and many others in our daily living. And even after paying all these taxes we cannot use any facility provided by government for free. We pay extra money as toll tax on various roads; we pay money in railways and roadways buses etc. If we have to pay again for everything then where is that money going.
One thing is sure that whatever tax government imposes on any businessman, he will directly forward that to consumers by increasing the prices of goods. If I can remind you the figures of tax payers in India then they only summed up to 10% or may be less of total Indian population. That means 10% of people are taking up the load and paying for 100% people. I am not an economist but I feel there is no proper taxation plan in India.
If we consider the upper class of earning people then no businessman is paying full tax on whatever he is selling and there is no trap to catch them. When VAT was introduced then it was said that it is for betterment of common man and they don’t have to pay tax on same products at various levels. But do you think it is properly implemented?
Now if we consider the so call poor people who are doing business then they are not paying single penny of tax to government. I am taking an example of a tea maker near to my place. Most of them are using domestic LPG for his burners and not purchasing it at commercial LPG rate. Can you believe he has a daily turnover of around Rs 10000? I can show the calculation:-
Number of kettle he distribute =70
Number to cups in each kettle1=15
Cost of each cup=Rs 3
Total money generated by distribution of tea= 70*15*3*2 (Twice a day)=6300
And total money he generate by selling tea on his shop must be around 3700
Now this guy is distributing his tea in various companies and almost all nearby offices. And if we calculate his annual turnover comes to 12*30*10000=3600000=36lacks. Thisi income is just from one shop as he had a small chain of his tea shop in city of Pune; I guess 4-5 branches.
Can you ever image how much one can save in just selling tea? And he is not paying anything to government for this income. Is government taking any steps to trap these small businessmen? No, because it will effect their vote bank. Same is the case of private busses and auto/taxi drivers. There are thousands, lacks of such people who are showing them below poverty line but they are earning much more then middle class people.
Today morning I read news of increasing the service tax. There is always a slogan by Indian common man that “Dal- roti kha kar kaam chalate hain” (We are surviving in having just dal and roti). This slogan is no longer true for them as cost of dal is now increased more than 50 rupees a kg. And cost of other consumable goods has also increased. If we see the growth and salary of people in India then cost of various goods are now already doubled or triples (we can take example of pulses, petrol and even salt). Is this the case with the salaried person? Is there salaries are also tripled now? No, but they have no other option but to bear with this.
Government is showing growth rate as 8% every year but I am worried they are going down by double of this figure every year. I am worried in thinking of situation of India 10 years down the line that how common man will survive.
This is my suggestion to government that instead of thinking of various issues regarding the development of country and setting new industries in India we should first think of basic problems of this country. Government should think before selling land of poor farmers and restricted area land to various industrialists and set up SEZ to fulfill there needs and generate money out of that. No country can because economically fit if basic needs of citizens are not fulfilled.
Labels: Income tax, india, tax, taxation
posted by Gaurav Bahl @ 1:46 AM
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