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Old 7th December 2015, 14:53   #46
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Default Re: Taxes: How much do we really pay the Government in India?

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Originally Posted by vinit.merchant View Post
Agreed. In UK it is close to 40%. But have you even looked at what they get in return?
Yes, totally agree, Vinit!! As I mentioned, how Govt. uses the money is a different debate and we will eventually get into a political debate. Which is not appropriate in this forum or this website. I just wanted to clarify that the tax collection from each individual is not high but nominal.
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Old 11th December 2015, 11:08   #47
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Moneycontrol News : Govt collects Rs 21,054-cr via petrol, diesel cess in FY'15

Full News: http://t.in.com/dYoI
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Old 13th December 2015, 08:49   #48
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The goal of this thread is not to be 'anti-tax'. The role of any modern state government is to levy taxes and increase them over time. And do redistribution of wealth in the economy to help the bottom 20% of the population raise living standards and to keep social order.


The goal of this thread is to make people aware of the substantial taxation even if they are not paying direct taxes. Modern tax theory favours indirect taxation in proportion to consumption.

The goal is to encourage a feeling of 'ownership' of state infrastructure and encourage debate about citizen activism.

The almost 22k crore excise on fuel by law is collected for 'maintaining roads and developing rural roads'. I see a pitiful state of roads and major NHAI roads becoming paid.

I also see poor interest from Municipal authorities regarding the 'swacchh bharat' programme.

People in my suburban town are unwilling to demand improved services from authorities as most of them underpay taxes, a lot of them take money/favours during polls.

Only citizen activism can improve infrastructure, there are plans in place to set up waste treatment, parks, clinics etc. but they are held up in red tape because people aren't aware or don't care.

Its time we became more active in demanding our share of public services that the society collectively has pooled money for.

Our 2%, of GDP spend on health care is among the lowest public expenditure in the world.

Government Health care facilities have deteriorated in the last 15 years in front of my eyes.

Taxes are here to stay and more transparency will bring more people in the direct tax umbrella. But the poorest and the richest pay the same tax on their mobile/electricity/fuel bills. And we should demand better services /infrastructure.
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Old 13th December 2015, 09:05   #49
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Default Re: Taxes: How much do we really pay the Government in India?

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Hmmm ... I think different. The 30% is at the highest slab of Income. If a person has an annual income of Rs 1500000.00, as per the slab system, his tax will be Rs. 345050.00 which is just 23% of his income. This includes the education cess of 3%. You can try this with any Tax calculator available online. This calculation does not include tax rebates under various sections like Home Loan, Medical, Infra Bonds, Insurance etc. ...
Adding all these sections will bring down your total tax liability. So, in effect, the Govt still only gets close to 20% of your earnings.


It is far less than what people in other countries like US/UK/Australia pay but it is still more than countries like Singapore/Dubai.
Now about the VAT and Service Charges ... even if we eat out say 100 times a year, we will end up paying around 14 - 15 % of the amount we spent, right?

This is for a salaried employee but the calculation gets tougher if you look at a businessman's income. I have seen and heard, how many businessmen try and navigate through myriad amount of loopholes to avoid paying even 15% of their total income. That's why the Govt. always fall short of their collections. I think the proposed GST solution could help Govt. to address some of the shortfall. It could also alleviate our concerns of VAT/Service Tax/Cess etc. ... there will be one fixed rate for all transactions and it will be transparent.

All in all, Govt may not be over charging us in terms of taxes but they definitely underpay us in terms of services rendered for e.g. bad roads, water shortage, garbage issues etc. And that, I feel, make many people try and avoid taxes. Anyway, that's a different debate which I attribute to inefficiency and incompetency of many in the Govt. machinery.

In India: we have freedom, security and dignity of life for which the tax we pay to the Govt is justified.

Not quite true I am afraid.
Even after taking into account all the legitimate ways to avoid taxes honestly, if one falls into the highest income group, there is a point beyond which one simply cannot save taxes any more, so one does get into the 31-34% bracket.

Next, in reference to indirect taxes, we pay excise, VAT, Road Tax, Service Tax, Surcharges, Education Cess, Swacch Bharat Taxes etc etc.

I am happy to pay my taxes. I am also quite happy if they would take away say even 20% of what I pay, to increase the pay of public servants like the Police, Post offices, Fire Services and the like. I would not even mind if the evil politicians and others take their cut of another 10%.
But all I ask is that they give us an ROI based on 70% of what we pay - give us an ROI by way of decent roads, infrastructure, safety, street lighting, garbage free environment, clean air and so on.

Is this too much to ask, considering this is the bare basic of what we are supposed to be paying for?
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Old 13th December 2015, 09:14   #50
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Originally Posted by shankar.balan View Post
But all I ask is that they give us an ROI based on 70% of what we pay - give us an ROI by way of decent roads, infrastructure, safety, street lighting, garbage free environment, clean air and so on.
These are 2 different things. Taxation is about getting money. Its like salary for the government.

Where and how to spend it is a different problem altogether. A guy who earns a lot of money can either choose to spend it on the good things like house, education for kids etc OR fritter away the money on useless things that ultimately push him towards a very mediocre life. So I believe the Government is getting decent amount of tax - perhaps not a fair distribution in terms of who are paying it. But using that money is utterly mis-managed with corruption being the main problem.

I don't think GST will solve that problem!!
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Old 14th December 2015, 15:28   #51
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Default Re: Taxes: How much do we really pay the Government in India?

An ex-PM once once said that 15 paisa for every rupee reaches it's destination. So we all pay for the inefficiency.
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Old 21st December 2015, 08:17   #52
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Get ready for more taxes


http://www.thequint.com/business/201...tcy-bill-today
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Old 21st December 2015, 09:09   #53
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http://www.catchnews.com/business-ec...450527461.html

A different take on GST.
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Old 24th December 2015, 17:19   #54
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Default Re: Taxes: How much do we really pay the Government in India?

There is a terrible joke going on in Karnataka. I don't whether it is limited to Karnataka only, but here it is. VAT is supposed to be levied on goods, and Service tax is supposed to levied on services.

But do you levy on software product or software service? The Karnataka government which is located in the Silicon valley of India, thinks it is both. So if you buy a software product or service, you pay VAT and service tax. I just got a quote for a software, this is how the numbers look.

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So, consider an individual in 30% tax bracket. If he earns another 1 lakh, he only gets 70,000 in hand. Then he buys the above software spending that whole amount. He gets a product worth 58,900 on hand. He basically paid 41% to the government and 59% for the software. And the software maker again pays VAT and ST for items that enabled the production of this software. Then he pays salaries to employees, of which again 30% will go to the government.

But let's say the software was made by an individual, he has to pay almost 20000 of that as tax, leaving him with 39000. After when he buys anything with that money, he has to pay VAT, ST or both.

So it is fair enough to say that government gobbles up more than 50-60% of turnover in domestic software business. That is why software industry wants to focus on abroad market, which attracts neither VAT nor ST.

Last edited by Samurai : 24th December 2015 at 17:29.
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Old 11th February 2016, 20:04   #55
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Finance secretary says India 'lightly taxed' and corporate taxes have been reduced to 25%. Encourages CA's to help increase tax/GDP ratio to 20 % from the present 16/17%.

I guess the policy is shifting towards more taxation from non-corporate tax assesses.

http://wap.business-standard.com/art...1100929_1.html
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Old 29th February 2016, 16:59   #56
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Get ready to pay more for cars. 1%-5% 'infrastructure cess' on cars.


http://www.financialexpress.com/arti...ensive/217478/
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Old 29th February 2016, 18:57   #57
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Default Re: Taxes: How much do we really pay the Government in India?

From what I understand, the following are the new taxes -

4% high capacity tax for SUVs.

Infrastructure cess - 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity (the present 4m & 1200 cc limit?) and 4% on other higher engine capacity (again, the present 1500cc limit?) and SUVs.

1 per cent service charge on purchase of luxury cars over Rs. 10 lakh.
So, prices of ALL cars will go up.

In addition, a new cess - "Krishi Kalyan" - introduced @ 0.50%. May be levied like Swach Bharat Cess? Be prepared to pay more on all your bills.....

Last edited by vrprabhu : 29th February 2016 at 18:59. Reason: Emphasised the items..
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Old 29th February 2016, 23:13   #58
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Default Re: Taxes: How much do we really pay the Government in India?

I don't know why its always "Why aren't farmers paying tax?". Everybody needs to pay tax. What about the middleman delivering farm produce to the market? What about the carpenters, electricians, plumbers, house brokers, autowallas, cooks etc? Being salaried middle class is the worst scenario where one is obligated to observe all the tax rules. And we also have to bear apathy/ego from bureaucrats, bmtc gundas, the amazing roads leading to ITPL.
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Old 1st March 2016, 01:15   #59
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Quote:
Originally Posted by Samurai View Post
But do you levy on software product or software service? The Karnataka government which is located in the Silicon valley of India, thinks it is both. So if you buy a software product or service, you pay VAT and service tax. I just got a quote for a software, this is how the numbers look.
Any product that is produced/created/imported is taxed by central government in the form of Central Excise, Service Tax or Customs Duty.
Any sale of product or service within a state is taxed by State Govt in the form of VAT.

Hence any manufactured product you buy any where in India will always have this State tax in the form of VAT and Central Tax in the form of Excise/Service/Customs. The only difference is that the Excise or Customs is always included in the MRP and you never get to see that specifically mentioned but ST will be mentioned in the bill.
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Old 1st March 2016, 03:15   #60
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Default Re: Taxes: How much do we really pay the Government in India?

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Originally Posted by Blue_V View Post
I don't know why its always "Why aren't farmers paying tax?". Everybody needs to pay tax. What about the middleman delivering farm produce to the market? What about the carpenters, electricians, plumbers, house brokers, autowallas, cooks etc? Being salaried middle class is the worst scenario where one is obligated to observe all the tax rules. And we also have to bear apathy/ego from bureaucrats, bmtc gundas, the amazing roads leading to ITPL.
I totally agree with your statement! I am from coorg with most of the income being Farming. In the last 1-2 years everybody with a bank account has received an IT notice. Its ironical when my neighborhood "Chaiwala" who runs a 10*5 stall and uses firewood as its not economical to use a LPG cylinder so that his tea can still be under Rs 10! When you respond to the first notice, you get a second notice asking you to furnish details of all transactions from 2000-2014. Is this not tax terrorism to say the least. How can a person who is either a farmer, housewife or a pension holder try track his transactions all the way back 10 to 15 years? Its not like we have our own set of lawyers and chartered accountants who can guide us with the loopholes!

Coming to why farmers do not pay taxes. I believe anyone and everyone with a pan card number needs to file their taxes even if they are exempt. This is the only way the govt can get its revenues from all equally. Every trade and business which deals with any buy or sell of an item also needs to do it with a bill. In the farming trade all the folks who buy our product deal only in cash and they hand it to the next dealer who also handles cash. Totally unaccounted for and in case a tax person raids him, all you get is 2 lungis and 2 shirts and a chair and a table.

Also many here have mentioned that you expect return on investment for your taxes, which is true everywhere. In small towns and villages in our country the roi is basically broken down roads, non existent drainage and water, terrible health care facility and Frequent if not unexpected power supply, sometimes for days at a time.

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