Kitne Aadmi the?
Mogambo Khush Hua?
How’s the josh?
These are a few iconic movie dialogues, etched into our minds often casually slip in during daily conversations. Pop culture references and dialogues have become almost staple in our discussions. Coming to one of India’s favorite topics of discussions: Taxes; there’s one such dialogue that is a constant and often drives discussions. Which one are we talking about?
Our dining table discussions, hall room talks, office bench gossip and tea stall chats are incomplete without this sentence when talking about taxes. This sentence surely merits its use, the weight it carries for its size is immense. The sentence delivers a punch and how. Summing up everything we are as a country in less than 20 words. But are we really just that? Is there a deeper problem? Or is it much ado about nothing?
Are taxes a metric of something more than numbers? Is somebody who pays taxes deserving of a higher standpoint than somebody who isn’t? Or somebody who can’t? These are very poignant questions that flow as the undercurrent when somebody makes THAT statement. There are different schools of thought when it comes to this challenge.
When we look at the country around us, we see disparaging inequality and for the topic of discussion let us only stick to the inequality in terms of income. The inequality that sometimes we choose to and sometimes we need to ignore. A section of the population exists that works daily to have dinner, at the same time we have a section of the population that paid a tax that is worth more than the cost required to feed an entire town a meal.
Numerically and statistically speaking, 1 crore rupees paid as tax will definitely help build better flyovers, cleaner sewage systems and wider roads than a ₹ 756 tax would. And which is significantly better than no tax given altogether. But humans are much more than numbers and stats, and we embark on a journey as a country together where we move forward with everyone.
All tax payments are of equal value not numerically but ideologically, wherein taxpayers believe in contributing towards achieving a shared goal as a country.
The Indian tax system is one of the most well-set systems in place, at least theoretically. Where the inequality is taken into thorough consideration. Out of this ambit of discussion are people who should be paying taxes and don’t. Apart from it being legally wrong, it should be twitching your moral senses as taxes are being collected from you because you are better off than 90% of India, at least financially.
Up until 2018, everybody earning was liable to pay a tax, but in 2018 a change in rules which said any income upto 2.5 lakh rupees will be exempt from taxation was a welcome change. A concept of surcharge which is fundamentally a tax on tax came into existence from 2019.
- A surcharge of 25 per cent is now charged for those with annual income between Rs 2 crore and Rs 5 crore for FY20.
- A surcharge of 37 per cent is charged on annual income in excess of Rs 5 crore for FY20.
Not just that, the recently introduced new regime in 2020 also protects those who earn on the higher side by giving them the option to save tax through lower slab rates. Progressively year after year there are better changes being incorporated to make sure everyone is taken into account.
This is not a moral rights lecture, but just a reflection of how we are moving as a country. As the tax filing season draws to a close, we have a record number of taxpayers at 2.38 crore Indians (which is more than 1% of the population, in case you were wondering). It is a clear indicator of more people subscribing to the idea of taxes. Hoping that this helps you enrich your discussions around India and tax and helps you say more than that sentence.
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