Direct income tax from individuals is just 28% of central tax revenue

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Theranos

central govt tax collections 

 gross Tax revenue  2022 -23 = 3054192 crore 
Taxes on income = 833260 crore 
Despite the popular narrative of 3% pay 97% of all taxes ,the real picture is far lower approx @ 28% 

IMG4876

SOURCE https://www.indiabudget.gov.in/doc/rec/...df

few may argue that indirect taxes also should be counted miss the point that not just 3% solely pay GST but all 140 crore citizens pay that and mind it even gst collections dont cross 30%  of overall tax reciepts for central govt even including SGST wouldn't make it more than 40% 


Going by above data its clearly shows that the narrative falls way short on claiming 97 % tax by 3% 


I have empathy for people paying taxes in high percentages and no doubt MORE PEOPLE SHOULD BE PAYING TAXES but that  doesnt mean theyre (3% ) paying the the 97% of taxes is a truly false picture 


kindly go through the budget documents and analyse before commenting 

and even to tax to direct income GDP Ratio is in LATE SINGLE DIGITS around 8% Which is comparable to any other economies 

appreciate the educated ,meaningfull -healthy discussion

thank you in advance for having a insightfull discussion ( hoping thats the case)

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Generous Generous
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If 28% is less, then personal income tax should be abolished.

Finance Mentor Finance Mentor
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What is the point of this?

The 3% statement was never about the whole tax collection. It was always about how less than 3% pay ALL of the Income Tax.

By the data you have given,  it's a whooping 28%? Now how is that fair?

If 28% tax collection for whole country comes from only 3% people. That's totally unfair right?

This 3% aren't the richest people in the country. Most of them are middle class who always have more obligations than the Income they earn due to societal pressures.

The basic exemption limit has not been raised in a decade , I think.
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Benevolent Benevolent
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I didn't check details. But it still means 3% pay 50-60% tax and rest pay 20-30% only😉.

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It's not 50 % or 60 % but clearly  28 %...where does 50 -60 come from?

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Deal Cadet Deal Cadet
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Ye kaha likha hai ki yaha pe jo income tax de rahe hai vo 28% hai? If a family pays 10% income tax it does not mean all members of that family pay

10%/no. Of members.

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It's not about family but about overall population paying  taxes directly 

Benevolent Benevolent
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politically planted news. It does not indicate what % of total population constitute the tax payers who pay that 28% tax? 

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Kindly  Understand  before comment..

Generous Generous
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If 28% is less, then personal income tax should be abolished.

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It's not about earnings % it's about the way a economic society functions 

It's valuable 28 % contribution  and not 97 % is the point I am not against  low taxation but against falsely claims of 97% TAX is paid by 3 % 

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Cool Cool
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Just 28%? Aur sir Indirect Tax bhul gye? Property Tax, Stamp duty, water tax etc..?

50-55% income tax me jati hai. Milta hai kya wo aap ko bhi pata hoga. Bade log Farmer ban jate hai. NGO khol ke jhol karte hai. Relatives ke naam expenses claim karte hai. Salary class ko koi expense ka claim nahi milta.

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Bro do only 3% pay all above indirect taxes....may be you personally pay 50 -55% but certainly not 97% that's the point

If you want  lower taxes...Move away from SALARIED STRUCTURE OF INCOME because in TAX FOOD CHAIN SALARIED ARE HIGH TAXED category 


I CLEARLY SAID MORE PEOPLE SHOULD BE PAYING  TAXES that include AGRICULTURE INCOME TOO

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Deal Newbie Deal Newbie
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Ritambra Prakash (ACP/CB)
For Deputy Commissioner Of Police
Cybercrime Cell / Computer Centre
Police Headquarters,

WHAT IS THIS

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WTF? Is this 

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Finance Mentor Finance Mentor
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What is the point of this?

The 3% statement was never about the whole tax collection. It was always about how less than 3% pay ALL of the Income Tax.

By the data you have given,  it's a whooping 28%? Now how is that fair?

If 28% tax collection for whole country comes from only 3% people. That's totally unfair right?

This 3% aren't the richest people in the country. Most of them are middle class who always have more obligations than the Income they earn due to societal pressures.

The basic exemption limit has not been raised in a decade , I think.
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I am not saying 28 % is good but certainly 97% narrative isnt true 

and even  I clearly say more people should be paying taxes 
The POINT 3% PAY ALL TAX  is false narrative they pay HIGH 28% is real
This is comparable to any other countries taxation both at individual & absolute gdp to tax level 
& yes there should be some relaxation for bottom of the tax payer pyramid in the form of higher standard deduction etc 



Deal Subedar Deal Subedar
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The 3% number is incorrect. 7.4 Crore ITRs were filed last year and 5.2 Crore gave 0 tax. So only 2.2 Cr people only paid taxes.

2.2 Cr is more like 1.5% of our population and not 3%.

So you should say 1.5% of the population paid 28% of the total taxes plus they paid stamp duty, ltcg, stcg, gst, etc etc.

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fair enough but still my point remains largely intact not 97% of taxes are paid by few

BUT STILL HIGH @ 28%

Yes indirect taxes too but this 28% also contain ltcg -Stcg but still not 97% and everone pays indirect taxes irrespective of  his income 

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Deal Lieutenant Deal Lieutenant
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No offense -> this is wrong comparison

Let me clarify, What I heard from childhood is -> 3% of people pays taxes that covers 97% people's taxes of the country

not what you said as "narrative of 3% pay 97% of all taxes " -> this is not what I heard


the comparison is about "quantum of people" with respect to "quantum of money" -> this what i heard 

so what you said as 28% approx that paid income tax is actually 3% of people who actually paid that 28% -> this was the popular belief 


Not sure if this 3% stands true in 2023-24 as we have to check USING SENSEX OF POPULATION but the popular belief was comparison of population WHO PAY TAXES (is 3%) AND who dont pay tax (is 97%), 

If i am wrong someone correct me 

(97% are from "unorganized sector" or "business professionals" or "small entrepreneurs" who know how to legally remove tax from their balance sheets xD

3% who are mostly WORKING IN "organized sector", dont HAVE WAY TO evade this tax legally and hence pays the taxes) 

Theranos

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3 % no is still not accurate but could be lower since census etc data is misding but broadly keep below the 3 % or something like 1.5-2% is correct on no of people paying taxes 


but 97% of taxes paid by these prople is incorrect ,,the data clearly shows that & people claiming Indirect taxes are partially thier contribution not solely these 3% pay that tax 


next point to consider is all indirect taxes in form Gst (cgst +igst+ sgst) doesnt breach 40% of tax collections so even if take 1/2 of gst is paid by these 3% then also its still around 50% 


and experts clearly say gst contribution is around 30% by these 3%  which would be like 12% more or 28+12 ie 40 % of all taxes are paid by 3% 


but even if we consider 50% of gst via 3% then also its 28%+20% which is still 48% which is a far cry from 97% 


and even if we consider excise +fuel+ customs etc then also its mere approx 17% of tax collection of which even if we take 50% paid by 3-% its still 40+8.5% or 48+ 8.5% =49-56% at max which is a good 40% less than what people claim 


note: still we have to take out refunds under gst + input tax credit + subsidy etc 

so Net net it could be as low as 40% or high @ 56% 
No doubt 40% or even 56% paid by few people is high & more people should be under direct tax 
but 97% is totally false 
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Deal Lieutenant Deal Lieutenant
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So the ppl who are paying direct taxes also have to pay indirect taxes so they do contribute to rest of 72%

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Absolutely but not solely contribute & estimates are around 30% of this 72% to 50 % of 72% 

which means 22% to 36% max 

Finance Mentor Finance Mentor
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Despite the popular narrative of 3% pay 97% of all taxes ,the real picture is far lower

I appreciate the argument. The point is if the 3% is so miniscule, why can't direct tax be abolished and increase the GST more on luxury and non essential items.

Also the biggest point is 97% are not DOUBLE TAXED.

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It's not just about the money solely its about the incentive & whats the value that can be unlocked by abolishing it 

and mind it no other economies even from 1000s of years old civilization have sucessfully done that & had favourable outcome 

This is illogical  to say abolish 

And clearly you have benifits for being double taxed which they lack otherwise 

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Finance Mentor Finance Mentor
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image

Income Tax paid by a handful of 3% consists of 15% 
GST paid by 100% indians consists of 17%

Forget the empathy for high tax payers, this inconsistency of only 3% paying double taxes are rare in the world.

Source: https://www.ndtvprofit.com/business/budget-2023...

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i am not justfying double taxation but guving reasonable explanation why its there 

paying 15% of gst out of 17% where is the data 

and still if you add that whole 15% its still 28+15% = 43% 

43% is still high but that  doesnt mean 97% either 
i clearly say more people need to pay tax and few are paying higher taxes 
Benevolent Benevolent
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@Seinfeld

Borrowing, non-tax receipts and non-debt receipts are not tax and not "revenue". So these need to be removed before computing any percentages. After adjustment GST is 29% Corporate Tax and Income Tax 26% each Excise 12% and Customs 7%. GST, Excise and Customs are indirect tax that are passed on to the final consumers.

3% Indians pay 97% personal income tax (direct tax) i.e.  3% Indians fund 25% of Govt revenue directly and also shares a part of 48% Indirect revenue.

A significant part of the population only transact in unorganized sector which are not subject to any Indirect tax. 

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Agree on taking out non tax revenue which is what i have posted and data shows 

but again the categorization of direct income tax is where i have contention 

 if you are categorising direct tax for individuals where does the point come from because all of these are people with taxable income which are grouped under for a reason ie theyre direct taxable income people 

going by that logic if you go on subdividing like say people with above 1cr taxable income then  may get you something like  99.999 % of tax are paid by less than 1% of population or sonething like that 



more than 25% govt is funded by direct taxpayers is apt descreption ie to point 


Finance Mentor Finance Mentor
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Where did you hear or read that 97% of taxes are paid by 3%? I have never heard anyone saying this!

Even a recent news said less than 2% pay whole income tax collected. No reputable organization or others claimed 97% taxes are paid by 3%.

This seems to be your argument for every comment. Can you share any source of this misinformation?


@DEEPANGEORGE @Seinfeld
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This is a folklore for years starting way back during jp movement & emergency 

So if Indira gandhi would be there till now thus would have got a new slogan like garibi hatao 

🤣🤣

This was a period where it was almost true since state was controlling every economic activity possible 

This got changed with 1991 reforms but deeply still in hangover 

No media was allowed to carry this narrative back in emergency days nowadays it's a click bait headline for many shady articles especially around inflation & tax changes during budget 

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