How Much Tax I need to Pay - Any Limit??
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How much I need to pay as Tax in my own country?? How many times, the same Income is being Taxed? When Earning - Income Tax, When Spending - Service Tax or GST, When in Medical emergency - Again pure expenditure is also taxed.? When I go for outing to enjoy a bit with my Family - Again Tax.
Now See the Impact.........Mr. FM ........!!!
What I pay for buying an item worth Rs 1000.....!!!
Assume that I need to buy an item of base price of Rs 1000.
Assume it attracts GST @18% - An Average range of Tax.
I will need to pay Rs 1000 + Rs 180 = Rs 1180 for that item.
Now, I need to earn Rs 1180 first, to be able to pay this amount.
Assume that I am in the 20% Income Tax bracket. It will be very high in case of 30% tax slab.
If I earn Rs 1486.15, then I will have to pay Income Tax of Rs 297.23 (@20%), and a Cess of Rs 8.92 (@3% of the Income Tax), and that will leave me with an earning (after Income Tax) of Rs 1180.
Hence, to buy an item of base price Rs 1000, I need to earn Rs 1486.15.
Which means that I pay Rs 486.15 in taxes on the purchase of an item of Rs 1000.
And this implies a tax of over 48.6% paid overall (through both direct and indirect taxes). It would be higher if you are in the 30% tax bracket! Do You know - How Much - 70.7% - Yes I need 1707 Rs. to get net spare income of Rs. 1000.
Now, this figure will be far higher for items in the 28% GST slab. Any Guess again - 1852 Rs. i.e. 85.2%.
So, Practically Mr. Finance Minister & Dear Prime Minister, we are paying almost Half of our Salary as Tax.
Is it Fair....??? The biggest Issue is that Service Tax is actually a double taxation on my Income. So please review the Tax rules in totality so that we - Salary Class - do not suffer with this double or triple taxation.
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