Personal Income Taxes in India

Personal Income Taxes in India

11 Maharaja or Big Macs. That is approximately the per person contribution via Personal Income Tax in India. And apparently, this is the best that India has seen since Independence. The Indian Central Board of Direct Taxes has recently started putting out fairly substantial numbers, reports and trends on their website – thanks in part, to good results in compliance and collections. It is important to note that taxes are also levied via other more substantial channels and our analysis is restricted to the kind of tax which evokes the most raw of emotions – Personal Income Tax. 2017-2018 has seen a total collection of $57.3 Billion in such taxes, driven by a whole host of measures and one major black swan event – Demonetization. However, we must not forget that less than 7% of the working population or 2% of the total population actually pays any tax. It is because of such minuscule numbers that many experts and economists, have time and again debated the need to have any Income Tax in India, whatsoever. Depending on how you look at these numbers and your economic viewpoint – there may be a good objective case to abolish Income Tax. There definitely is a great emotional one.

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