Time for a Fairer Tax System in India!
The Time Has Come for a More Equitable Tax Structure in India!
The Indian tax structure is in urgent need of reforms. The gap between what the rich and the poor earn is widening, yet our tax system is doing too little to address this inequality.
The current tax brackets for FY 2024-25 are as follows:
? No tax on income up to ?3 lakh
? Income between ?3 lakh to ?7 lakh: 5%
? Income between ?7 lakh to ?10 lakh: 20%
? 30% for those with an income above ?15 lakh
Even though these rates seem progressive, they do not deal with the incomes of super-rich individuals adequately. For instance, people who earn more than ?1 crore a year still only pay taxes at 30%, which is the same rate as someone earning ?10 lakh. Indeed, such flat taxes on high incomes do not reflect the principles of progressive or increasing taxation system.
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What Needs to be Done, A Call for Change:
? The individual income should be subject to a 40% tax rate between ?1 crore and ?5 crore.
? A 50% tax rate should apply for any individual who earns above ?5 crore.
Additionally, there should be standardization of the capital gains tax rates for these high-income earners at 20%. This would ensure that individuals who are benefiting most from India’s economic growth are giving back enough to their communities.
In my opinion, this proposed tax system will contribute towards decreasing income disparities as well as increasing funds for enhancing public services, social programs and infrastructure. Now we have to develop a tax system which is more equitable and just so that the rich can pay their fair share of national development.
We need a tax system that caters for everybody not only the richest 1%.
#TaxReform #IncomeInequality #FairTaxation #IndiaEconomy #EconomicJustice
Ex HSBC | Ex TCS | Custody | Asset Servicing | Capital Markets | BaNCS Corporate Actions
3 个月What was earlier considered high income is not high anymore. Even the car cleaners are earning 50-60 k per month in tier 1 cities. People earning 10-15 lpa in a tier 1 city still pay tax and struggle in case of medical emergency, cannot dream to buy homes. So there is a need to look at what is that income level which will support these set of people who are at the bottom of the tax pyramid and are high in numbers. Secondly, there is also a need to expand the tax net. There are businesses which are enjoying all the luxuries of life by showing business expenses and yet pay no tax. Govt needs to address that. Salaried middle class is easy to milch and a minority vote bank and hence has been constantly ignored.