Taxes: How much do we really pay the Government in India?

drsingh · 2nd March 2016, 17:48

I was going to write a long post working out the total taxes on Factory price of a car. But this article has done the research and is comprehensive.

Summary (approx): Maruti Swift :25%

Honda city:39%

Toyota Fortuner: 48%

After budget hikes additional 1%-5%. Additional . 05% service tax.

Taxes on Fuel: approx 50%

So a guy who wishes to buy a Toyota Fortuner @30 lakhs on road will Infact pay 15 lakhs to the government and then 50% of fuel tax throughout ownership.

If he's a tax paying citizen, he has to earn 43 lakhs pretax to make the purchase.

So in that case 28 lakhs paid to the government.

65% of gross salary in taxes.

There may be some inefficiencies in the calculation. Just off the top off my head in a caffeine rush.

http://www.mycarhelpline.com/index.p...=572&Itemid=10

P. S. I've rounded off the calculation to 50% taxes as I've not calculated the taxes on components sourced by the manufacturers and the corporate taxes paid.

drsingh · 3rd March 2016, 07:50

I would really appreciate it if a member of the forum could work out the total tax component of buying a house on EMI's. The total taxation on the Land, construction, Sales, emi, etc.

Housing and Transportation being the largest component of spending for most people, a clearer picture of the fact that you are working for the government most of the time will communicate better the need for every citizen to be more involved in demanding better infrastructure and services and be more involved in governance.

faustus77 · 3rd March 2016, 23:34

Quote:

Originally Posted by maddy42

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.

Maddy

Maddy
Hi
Your last sentence is the bitter truth.
I have read quite a lot of views that in India the income taxes are low...but what about every conceivable indirect tax on everything. At the end of the day what you get in return is nothing.
AFAIR the IT department cannot ask for details beyond six years. Are you sure about the notice? Somebody please clarify
Thanks a lot
Regards

drsingh · 9th March 2016, 11:12

http://m.firstpost.com/business/im-n...x-2663724.html

Citizen activism saved the day. We need more of it.

drsingh · 29th October 2017, 11:54

An update for the thread. Taxation on beer and IMFL.

https://m.timesofindia.com/city/mumb...w/61282201.cms

And regarding housing, the tax component including stamp duty, GST etc. is between 34-38%. If you are paying EMI'S after paying 30% income tax, gross pay out as taxes paid goes higher.

drsingh · 19th December 2017, 15:41

We've come a long way in terms of taxes.

The second screenshot shows the value of 1500 rupees in 1945 in terms of gold purchase power which is a good indication of longterm inflation in terms of actual purchasing power.

The 1500 rupee slab for no taxation in 1945 is almost 10 lakhs in today's rupee value in gold.

drsingh · 14th December 2022, 18:28

Quote:

Originally Posted by drsingh

We've come a long way in terms of taxes.

The second screenshot shows the value of 1500 rupees in 1945 in terms of gold purchase power which is a good indication of longterm inflation in terms of actual purchasing power.

The 1500 rupee slab for no taxation in 1945 is almost 10 lakhs in today's rupee value in gold.

2022 update. The 1500 rupee slab for no taxation in 1945 is almost 22 lakhs in today's rupee value in gold.

shankar.balan · 14th December 2022, 18:49

This is a depressing thread to read.
65% of one’s income is paid to GOI in taxes, one way or another, directly and indirectly.
And what is the ROI for the Tax Payer?
ZILCH.
This has to be the worst possible Investment in the World.

It is enough to make one want to emigrate and never return.

Linuskm · 14th December 2022, 19:05

Quote:

Originally Posted by shankar.balan

This is a depressing thread to read.
65% of one’s income is paid to GOI in taxes, one way or another, directly and indirectly.
And what is the ROI for the Tax Payer?
ZILCH.
This has to be the worst possible Investment in the World.

It is enough to make one want to emigrate and never return.

Taxpayer has to be a business person then you have means and ways to reduce taxes

drsingh · 8th January 2024, 09:32

Quote:

Originally Posted by drsingh

2022 update. The 1500 rupee slab for no taxation in 1945 is almost 22 lakhs in today's rupee value in gold.

Jan 2024 update.

The 1500 rupee slab for no taxation in 1945 is almost 25.71 lakhs in today's rupee value in gold (gold price approx 6300/gm)

montsa007 · 9th January 2024, 10:11

Slightly off topic, I sometimes wonder what exactly do we get after paying the taxes?
Majority of the roads are in poor condition, even the ones which we pay toll for.

Its not that I am against paying taxes, its essential to the country, but the benefits we get do not reflect the money we spend.

Only 1-2% of the population pays taxes, even if we remove children, elderly, the figure shouldn't be 1-2%.

Article : https://theprint.in/economy/more-ind...n%20in%20India.

Here is a good video I saw, sheds some light on taxes, and why government hates tax payers. (Not my video, but good content)

https://www.youtube.com/watch?v=TN91HpWY8_k

2nd March 2016, 17:48	#61
drsingh BHPian Join Date: Mar 2011 Location: Ludhiana Posts: 776 Thanked: 707 Times	I was going to write a long post working out the total taxes on Factory price of a car. But this article has done the research and is comprehensive. Summary (approx): Maruti Swift :25% Honda city:39% Toyota Fortuner: 48% After budget hikes additional 1%-5%. Additional . 05% service tax. Taxes on Fuel: approx 50% So a guy who wishes to buy a Toyota Fortuner @30 lakhs on road will Infact pay 15 lakhs to the government and then 50% of fuel tax throughout ownership. If he's a tax paying citizen, he has to earn 43 lakhs pretax to make the purchase. So in that case 28 lakhs paid to the government. 65% of gross salary in taxes. There may be some inefficiencies in the calculation. Just off the top off my head in a caffeine rush. http://www.mycarhelpline.com/index.p...=572&Itemid=10 P. S. I've rounded off the calculation to 50% taxes as I've not calculated the taxes on components sourced by the manufacturers and the corporate taxes paid. Last edited by drsingh : 2nd March 2016 at 17:55.
	() Thanks

3rd March 2016, 07:50	#62
drsingh BHPian Join Date: Mar 2011 Location: Ludhiana Posts: 776 Thanked: 707 Times	I would really appreciate it if a member of the forum could work out the total tax component of buying a house on EMI's. The total taxation on the Land, construction, Sales, emi, etc. Housing and Transportation being the largest component of spending for most people, a clearer picture of the fact that you are working for the government most of the time will communicate better the need for every citizen to be more involved in demanding better infrastructure and services and be more involved in governance.
	() Thanks

9th March 2016, 11:12	#64
drsingh BHPian Join Date: Mar 2011 Location: Ludhiana Posts: 776 Thanked: 707 Times	http://m.firstpost.com/business/im-n...x-2663724.html Citizen activism saved the day. We need more of it.
	() Thanks

29th October 2017, 11:54	#65
drsingh BHPian Join Date: Mar 2011 Location: Ludhiana Posts: 776 Thanked: 707 Times	An update for the thread. Taxation on beer and IMFL. https://m.timesofindia.com/city/mumb...w/61282201.cms And regarding housing, the tax component including stamp duty, GST etc. is between 34-38%. If you are paying EMI'S after paying 30% income tax, gross pay out as taxes paid goes higher. Attached Images Last edited by drsingh : 29th October 2017 at 11:59.
	() Thanks

19th December 2017, 15:41	#66
drsingh BHPian Join Date: Mar 2011 Location: Ludhiana Posts: 776 Thanked: 707 Times	We've come a long way in terms of taxes. The second screenshot shows the value of 1500 rupees in 1945 in terms of gold purchase power which is a good indication of longterm inflation in terms of actual purchasing power. The 1500 rupee slab for no taxation in 1945 is almost 10 lakhs in today's rupee value in gold. Attached Thumbnails Last edited by drsingh : 19th December 2017 at 15:56.
	(1) Thanks

14th December 2022, 18:49	#68
shankar.balan BANNED Join Date: Apr 2008 Location: Bangalore Posts: 11,368 Thanked: 23,142 Times View My Garage Infractions: 0/2 (8)	Re: Taxes: How much do we really pay the Government in India? This is a depressing thread to read. 65% of one’s income is paid to GOI in taxes, one way or another, directly and indirectly. And what is the ROI for the Tax Payer? ZILCH. This has to be the worst possible Investment in the World. It is enough to make one want to emigrate and never return.
	(9) Thanks