[anb]

The Union government's tax collections on petrol and diesel jumped 88 % to Rs. 3.35 lakh crore. Excise duty on petrol was hiked from Rs. 19.98 per litre to Rs.32.9 and diesel was hiked from Rs.15.83 to Rs,31.8.

The total excise collection was 53090 crore in 2013-14. It has now increased to 3.89 lakh crore in 20-21. More than 700 % increase in Excise duty collection in 8 years.

Read more at:
http://timesofindia.indiatimes.com/a...campaign=cppst

[for_cars1]

In our country of 130 crore people, less than 1% of the population paid income tax (reporting Rs 5 to 10L income) and only 46 lakh people (less than 0.5% of the population) disclosed income above Rs10 lakh and a measly 4 lakh people have disclosed income above Rs 50LPA.

Are 99% of our population (128 crore people) not earning anything?
Such are the dismally low figures of number of people paying Income Tax. It is highly unfair to tax only a few people (mostly salaried) in the name of Income Tax.

On top of Income Tax, the salaried people have to pay all other regular taxes like tax on fuel and everything else, so its double taxation.

The right thing for the Government to to is to:
1. Either abolish Income Tax for everybody and just tax commodities and services at the point of sale.
OR
2. Lower taxes on commodities and services for Income Tax payers. Either lower tax at the point of sale or as a refund, so that the 1% of the income tax payers are not double taxed.

Hope better sense prevails.

[anb]

Originally Posted by for_cars1

Are 99% of our population (128 crore people) not earning anything?
Such are the dismally low figures of number of people paying Income Tax. It is highly unfair to tax only a few people (mostly salaried) in the name of Income Tax.

Hope better sense prevails.

I am surprised by the fact that you are considering new born babies and students to pay income tax. Over 46% population in this country are below 25. How they are supposed to pay income tax ?

[for_cars1]

Originally Posted by anb

... Over 46% population in this country are below 25. ..

Not at all, nobody is expecting this 46% of the population to pay taxes.

My point is that just because the 1% tax paying salaried class does not form a strong voter base, they have no voice and continue to bear the burden of double taxation and nothing has been done to ease the tax burden on the middle class by anyone so far.

If tax compliance has to be increased, then something similar to what Russia did has to be done. Just do away with all the complexities and introduce a flat 13% tax with reduced tax burden. Compliance has vastly increased after Russia took that step.

[anb]

Originally Posted by for_cars1

Not at all, nobody is expecting this 46% of the population to pay taxes.

My point is that just because the 1% tax paying salaried class does not form a strong voter base, they have no voice and continue to bear the burden of double taxation and nothing has been done to ease the tax burden on the middle class by anyone so far.

Actually we should be happy, not frustrated. In order to become a tax paying citizen, one need to earn more than Rs.40000 per month. Less than 10 % Indians earn more than Rs 40000 per month. We should be lucky to be part of that minority. Two-third of the population (68.8%) of India leave under poverty as they earn less 2 dollars per day.

[Everlearner]

Originally Posted by for_cars1

Not at all, nobody is expecting this 46% of the population to pay taxes.

My point is that just because the 1% tax paying salaried class does not form a strong voter base, they have no voice and continue to bear the burden of double taxation and nothing has been done to ease the tax burden on the middle class by anyone so far.

Originally Posted by anb

Actually we should be happy, not frustrated. In order to become a tax paying citizen, one need to earn more than Rs.40000 per month. Less than 10 % Indians earn more than Rs 40000 per month. We should be lucky to be part of that minority. Two-third of the population (68.8%) of India leave under poverty as they earn less 2 dollars per day.

Nobody is asking the non earning population to pay income tax, but there are crores of people who are earning but evading taxes which is an open secret. Since the income tax compliance is so poor, govt has to increase other taxes to fill the shortfall.

Being a salaried person, I have not seen much meaningful income tax rate revisions in last 5 years. A salaried person pays more than 10 times income tax per rupee earned when compared to a business person.

[anb]

Originally Posted by Everlearner

Nobody is asking the non earning population to pay income tax, but there are crores of people who are earning but evading taxes which is an open secret. Since the income tax compliance is so poor, govt has to increase other taxes to fill the shortfall.

Why should poor people (majority) has to suffer for government’s inefficiency to collect taxes ? If the direct tax collection is low, why the corporate tax reduced from 30 to 22% instead of increasing ?

[Everlearner]

Originally Posted by anb

Why should poor people (majority) has to suffer for government’s inefficiency to collect taxes ?

I don't think anybody had asked poor people to pay taxes. It is only about tax evasion. Please read the above posts once again.

Also, there are so many people who are officially poor, but not so in reality. Many well to do households I know have a BPL card

[SoumenD]

Originally Posted by anb

I am surprised by the fact that you are considering new born babies and students to pay income tax. Over 46% population in this country are below 25. How they are supposed to pay income tax ?

Am surprised you assumed for_cars1 is considering the poor or babies/children/old to pay tax. Its very clear who he means, its the tax evaders.

Yes governments over the years have failed in raising compliance. Am sure if all the eligible folks (again not kids/poor/old) paid tax honestly financial situation of the country would have been better.

[anb]

Originally Posted by SoumenD

Am surprised you assumed for_cars1 is considering the poor or babies/children/old to pay tax. Its very clear who he means, its the tax evaders.

His question was why 99% are not earning anything. If you earn, then you may have to pay tax. Babies and Students are included in that 99 % percent. So It is not my assumption.

Around 47 % population are below 25 years.Only 30-40 % women are employed in India. Then about 10 % people are above 60 and they don’t have any income. The 99% suddenly comes down to less than 30%. Then out of this less than 30 %, how many people earn more than 40000 per month

[avira_tk]

Originally Posted by anb

His question was why 99% are not earning anything. If you earn, then you may have to pay tax. Babies and Students are included in that 99 % percent. So It is not my assumption.

Around 47 % population are below 25 years.Only 30-40 % women are employed in India. Then about 10 % people are above 60 and they don’t have any income. The 99% suddenly comes down to less than 30%. Then out of this less than 30 %, how many people earn more than 40000 per month

Thanks for pointing out what should be obvious, some people here are absolutely clueless about income levels outside their corporate sanctuaries. A question for those who are going on about tax evasion, how many people do you know working in MSMEs who earn 5 lakhs or more in a year?

Tax evasion is not the problem here, our per capita income is way below the tax threshold, most people will never qualify for taxable income in their lives. To put this in perspective, if we achieve the $5 trillion gdp target, will end up with only half the population above the threshold, that's average, actual numbers will be far lower. This moaning about income tax seems to be the most fashionable cause on this forum, if you are paying income tax, your life is pretty good, better than most working people in this country.

[Equus]

Under 25 age group + Farmers + evaders is a large number. If the tax base does not widen, there is always going to be surrogate ways of taxing everybody (and this includes people paying taxes as well). GST has helped widen the tax base significantly though you know how people still evade.

Hope they bring petrol under GST and stop milking it.

[2000rpm]

I am tired of seeing how government after government has failed to bring tax compliance in the country. I get furious for when I see my businessman friend, buy a personal car and take tax exemption on the same by showing as cost to company, while I pay 30% tax and buy a car with my post tax money.

I think, taxing cars is still ok to catch tax evaders, but salaried class is being milked to the maximum. With ITR, tax on car, tax on fuel, Toll taxes.

Kya kare hum, marr jaye?? (Meme reference)

[Lalvaz]

Originally Posted by 2000rpm

I am tired of seeing how government after government has failed to bring tax compliance in the country.

Actually, while I agree with you that successive govt's have failed to improve tax compliance in India, its not for want of trying. The demonetization exercise was largely targeting improved tax compliance. And by most accounts, it did achieve its goals, albeit temporarily. I think the execution could have been much better.

Originally Posted by 2000rpm

I get furious for when I see my businessman friend, buy a personal car and take tax exemption on the same by showing as cost to company, while I pay 30% tax and buy a car with my post tax money.

I've recently transitioned from a corporate career to my own startup. And I can tell you that there are a lot more personal resources that I use for my work, for which I don't claim tax breaks. And the example cited by you about availing tax breaks on a car purchase is availed even by corporates in their car leasing schemes, so perhaps your example might not be the best example of tax evasion. Tax avoidance yes, but absolutely within the legal framework.

Originally Posted by 2000rpm

I think, taxing cars is still ok to catch tax evaders, but salaried class is being milked to the maximum. With ITR, tax on car, tax on fuel, Toll taxes.

Kya kare hum, marr jaye?? (Meme reference)

Taxes on fuel are consumption linked and are therefore applicable to everyone who purchases it. It is an indirect tax and is not targeting only the salaried class. It targets even the exempt class, such as farmers, BPL etc. The only people who don't get affected by the increased taxes on fuel are people who are being reimbursed for it, like the government sector employees, or some corporate employees who get this re-imbursement for work related travels. Otherwise, it affects everyone, irrespective of income levels and categories. So your businessman friend has to pay these indirect taxes just like you.

Aap paani pee jiye.

[2000rpm]

Originally Posted by Lalvaz

Aap paani pee jiye.

This is not a salaried vs businessman discussion. My post was targeted to the unfair balance of taxation for the two parties. While things like toll and fuel are common, the upfront higher expense on the car is very very high. Not to mention the additional depreciation benefits.

The taxation system in India is very very regressive especially for the salaried class, and there are no debate that the government tries to milk the salaried class because they are not a popular vote bank. I know there is a counter argument to this, as businessmen pay a higher rate on electricity and gas, etc (I have had this debate with the friend I was referring to in the previous post)

Also, the demonetization is a political topic which is against the forum rules, so will refrain from commenting.