What savings after taxes in India

If you have been following the news recently, Indian Prime Minister Dr. Manmohan Singh has said that the present inflation rate is less that 5.5 (currently 5.44) and his Government is looking forward to bring the inflation less to 5% in a shorter period of time.

Good for all of us that his team is working towards that.

Here is my rant on TAX we pay.

Well you all know that the working class is the one which is forced to pay the tax or they don’t actually have control, the company pays the salary after deduction.

Before we start let us know how much is the Indian population find here

Well do you know there is still a large population in India who’s average income/ day is less than 1$

And there is the more familiar India, whose burgeoning middle-class
population of about 300 million is matched by a similar number of
impoverished citizens earning less than $1 (U.S.) a day
” Source: the star

So how many of the working community in India with respect to total population is paying tax
In a nation of 1 billion people, only 35 million Indians pay income tax. (You read that right: 35 million people, not 35 per cent of Indians.)” Source: the star

So that means 35 million of the population pays tax and another 300 million is already unable to earn 1$ a day

Fundamentally don’t you think there is some problem in the way our taxes are outlined, Rich people avoiding to get taxed and Middle class people suffering by paying tax.

I heard a story from a friend , just after the Indian freedom, when Nehru’s family have been ruling India. There was rule saying “Making money is sin” It actually meant the rich people making more money and poor people becoming more poor hence, the rich have to pay more tax.

Ultimately what happened was the increase in Black money, hawala etc. The rich people didn’t want a bank to hold their money. or involve the bank so that they don’t have any info on their current assets. They run their own bank so called the hawalas where the Government cannot even trace the source or the mere existence of money with them.

Should the Government be encouraging the riches to invest more in business and pay lesser tax and be provided more exceptions so that they become liberal in paying tax and doing some thing good for the people.

Here is one more trait, ask any shop vendor about the tax they pay, Well I did ask and the answer was “What tax, we don’t make that much money?” take any petty shop in a metropolitan city the average income should be 2000 INR per day that is 60000 INR per month that is 7.2 Lakhs per annum. I know it is not the profit which is 7.2 Lakhs per annum. There are shop keepers who make that kind of money.

Take the same with a working professional with a salary of 60000 INR per month and what is the tax he pays?
Flat 30% that is 2.16 Lakh as tax. Where is the money for him to insure himself and his family, how about his medclaim investment and atlast where does he have an option to save money.

For example take an autorickshaw driver in a metropolitan city his income per day is 500-900 INR/day. The working class actually pays tax on behalf on him or the 35 million Indian paying on behalf of the 300 million people who can’t afford to pay tax.

Conclusion: The Working class pays tax for himself and for the fellow Indian who can’t afford to pay tax and who doesn’t understand what tax is all about and continues to abuse, enjoy the taxed money, and while the riches avoiding banks on their Income transactions.

The Riches have found the way to avoid getting taxed. When will the working class understand and move towards to make a change in the current taxation system.

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