You must Sign In to post a response.
  • Category: Miscellaneous

    What if our government exempts the salaried class from paying income tax?

    Members,
    What would happen if all the salaried employees are exempted from paying a direct tax to our government?

    Our government collects tax from all the persons who work in an organisation drawing salary both government and private. The tax varies as per the slabs announced.

    What would be the loss to our government if it stops collecting tax from the salaried class? Or will our country benefit from this?

    I watched an interview with Dr Subramanya Swamy, PhD a renowned economist in which he said that exempting the direct tax from the salaried class would benefit for the growth of GDP of our country.

    Your views please.
  • #658688
    I don't know about the GDP growth. But the collections of IT will fall tremendously. These days the people who are paying tax correctly are only employees. Their salaries will be credited into their bank accounts and the employer will deduct TDS. So there is no way for him to escape. But a service person like a doctor who is practising outside will never pay income tax on the full amount he is getting. Similarly, business people will also never show correct profits and pay tax. Agricultural income is exempted from tax. So if the salaried employees are exempted from paying tax there will be a huge loss to the government. So I think they may not do that. Now the people who are earning up to 5 lakh rupees per annum are exempted from paying income tax.
    drrao
    always confident

  • #658692
    Then the government will have a loss as they won't get the funds they get from the tax of salaried persons. In my opinion, most of the tax government gets is from the salaried persons. Moreover, salaried persons always pay taxes because of employer transfer their salary in their account after deducting TDS. Therefore the government cannot think of it as they will have a great loss in such case.
    Sanjeev

    " It is better to be hated for what you are than to be loved for what you are not" ... Andre Gide

  • #658732
    Govt is already getting a lot of tax from corporates, revenue from GST etc and in that light it can stop charging tax to the salaried persons either in Govt or private. So only companies will pay taxes but not the individuals.

    Still I feel that to discourage over payment to the senior executives a 'Rich Tax' should be introduced and all those whose salary/ total income in an year is more than Rs 60 lakhs or any other threshold should pay a flat 10% Rich Tax. That will compensate for the loss of revenue to Govt on exempting Income tax to salaried class.

    Thoughts exchanged is knowledge gained.

  • #658763
    There will be a loss of revenue if salaried people do not pay taxes. For all developmental projects, the money comes from the revenue the government earns from various means. Income Tax is one of the few sources of earning revenues and according to the reports direct tax collections during the financial year 2017-18 is around Rs 10.02 Lakh Crore. Though there are some other ways from where the revenue is generated, the different tax slabs have to be rationalised. Everybody is paying indirect taxes every time there is a purchase and after the implementation of GST, this collection has increased.

    After considering all these and of course keeping the coming general elections in mind, this interim budget has given a relief to the salaried middle class. Income Tax is exempted for those having an annual income of up to Rs 5 Lakhs. After the demonetisation, the IT filing rates are much higher and because of certain strict measures, there is a huge increase in the number of tax collections. Since the earning from taxes has increased a lot, I think the government should think of ways to decrease the direct taxes from salaried people. There are still many loopholes due to which a lot of people are evading taxes. These have to be fixed to ease the burden on honest taxpayers and to generate more revenue from tax collections.

    Sankalan

    "Life is easier when you enjoy what you do"

  • #658767
    There was a suggestion that only expenditure tax or GST should be there but it could not be materialized as that time the GST prospects were not known. Now we are having a very good revenue from GST so the Govt can mull this idea further and it can be a reality one day.

    Individual tax is not required to be paid if Govt gets sufficient revenue from corporate tax and GST. The rich people who are spending much will pay more GST.

    If I am going to see one movie in one month I will pay only that much tax while a well to do person who is going to movies every week will pay five times more than me. So this way Govt is getting more revenue through expenditure tagged taxes.

    GST on luxury items is already high so it is a good thing and let rich contribute more to Govt kitty. It is absolutely logical and rational. Let rich people feel proud of contributing more to Govt funds. That is the true patriotism. Let us have that type of legislation.

    Knowledge is power.

  • #658828
    Dear Members,
    Dr Subramanyaswamy is a renowned economist of our country, and he is now in BJP. His advice to government is - Abolish income tax of the direct taxpayers. There must be something good in it. He won't say anything unworthy. According to him, It will help to increase the GDP, but according to me, it will also help BJP to win the election and continue to rule India from 2019 to 2024.

    No life without Sun


  • Sign In to post your comments