Is it a sin to be rich in India ?

The Income Tax data was made public for the first time in 2016.Releasing time series data for financial years 2000-01 to 2014-15 to encourage wider use and analysis, PM Modi had callled it a 'landmark move'.

The report showed that the share of direct taxes to GDP touched a high of 6.3% in 2007-08 and then declined to 5.47% in 2015-16. It was 3.25% in 2000-01.However FY19 gross tax to GDP ratio dipped to 10.9% from budgeted estimates of 16%.

Current highest rate of applicable income tax rate is 35.88% after factoring in the surcharge.As per the new rates from Budget 2019, the new surcharge rate will increase effective income tax rate by 3% and 7% for those earning between ?2 crore to ?5 crore and those earning above ?5 crore, respectively. Therefore effective tax rate will now be 39% and 42.74%, respectively for two segments of incomes.

The 42.74% tax rate is a whopping one, even more than US' 40%.

In an era where the government is trying to infuse even more FDI in the economy, this may pose as a tough challenge for large corporates where the effective rate after taking into account DDT comes to about as high as 48.31%.To compare and put things in perspective,China has a 25% rate, with a 10 to 20% rate for small scale enterprises. Singapore is even lower at 17%.

For an economy aiming to be thrice of what Apple and Amazon are, it is imperative that the ease of doing business also increases,because anyway the government expects the super rich to pay half their income as taxes.