India needs a 3rd Front

While the last 10+ years of Modi government has largely been to position India as a strategic uprising economy, there is no denying the fact that the Government to a large extent has failed in casting the tax net wide.

1. Yes the year on year tax collection has risen, yes the Consolidated fund of India has improved but even after 10 years of majority rule less than 10% India pays tax.
2. To top it all, looks like the government has taken middle class for a ride. 2.1. For a common man working you not only pay tax on income (this is ok!) but also on every time you spend and now even whatever little on can invest. Let’s first look at tax on Income. Your income tax can vary from 0% to 30%.

• For a 30L income, almost 6L would just get wiped in taxes. This is an approximate figure don’t hang me with your CA rope.

• For example, if your gross salary is 75L in India despite most standard deductions like 80c, Home loan, interest repayment and medical bills and insurance, a person pays 23L almost as income tax. 23L is a substantial amount & when paid for 5 years (every year) for a lot of us it can become meaningfully life changing.

2.2. Now let’s look at how much do you end up paying in taxes when you spend on goods and services.

• • Almost everything has 5% GST. But if you really go line item by line item on all your monthly/ annual spends, your average GST payment would be almost 15%. Put it simply when you 87k as expenses you also pay additional 13k in GST.
• • Also every other item would have cess & surcharges.

Case in point just look at airline ticket. Service fee would almost be 8%-15% of your base fare. When you buy a house you pay the following fees, stamp charges, registration charges and obv we all know nothing happens in registrar offices without something going under the table. Also in case you buy via broker then his fee will also consist of GST at 18% (assuming he invoices his services). Continued in comments