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  • Category: Miscellaneous

    Why should we be paid by our government and then taken back by the same government?

    It is about the Income tax collected by the government from the government employees. They are paid first regularly every month and taken back by the same government from its own employees.

    Why should our government pay first and then collect income tax for their payment? This is applicable to all government servants both central and state.

    Is it not a double work? Why can't our government find a solution to this problem and leave the government employees free from paying tax to their own government?.
  • #664678
    It seems they are making it too complex. In the private sector, the tax is automatically deducted in the form of TDS and if it is found that the employee has paid more tax while filing annual IT return the excess amount is refunded. This process is simple and if followed will reduce their workload to some extent. I am not aware of the process followed by the government to pay their employees though there may be some other reasons about why things are done in a different way.

    "Life is easier when you enjoy what you do"

  • #664692
    As far as my knowledge goes the estimated Income tax for the year is deducted every month from the Salary. The Income Tax estimated for the year and Income Tax deducted for the Month is also reflected in the Pay slip. I work for a Public Sector Company and we follow this system.

    As per the Income Tax Act , we are required to pay advance Tax If the remaining tax payable is more than Rs 10,000 .

    "If you don't understand my silence, you will not understand my words"

  • #664694
    My question is why should a government employee pay income tax to the same government that pays the salary? Why a give and take? Pay the salary without any involvement of IT.

    No life without Sun

  • #664702
    I have given this topic a considerable thought. First Tax apart from being a part of Government Revenue also symbolises the sovereignity exercised by Government over people. In such case Tax structure must be uniform throughout the country and no one can be given extra privilege. As in private sector Government officials must also pay tax and thereby symbolise his loyalty. Pay is for work done. Out of my hard earned miney I must be willing to shell a part towards tax.
    As rightly pointed out by members TDS is available to ensure less burderning of accounting procedure. But finally it is the Individual who must pay tax. The Individual must decide how much he wants to invest in tax saving schemes and other avenues available to him to reduce his payment of tax.
    Secondly suppose even if government brings in some calculation and reduces pay to such extent as such towards tax payment by Pay commissioin recomendations then as years progress it will give an impression as if Government Servants are enjoying Tax free salary which is not conducive to social impact and true spirit of democracy. It arbitrarily places Government officials above others against true spirit of Article 14, 15, 16, 19 and 21 combined with 300A of Indian Constitution.
    Then even 80C and 80CC of Income Act has provisions which changes even slab of Income tax for below 5 lakhs level and 5-10 lakhs level where bulk of Government Servants have their Income. This section gives them lot of choice. For example I can decide whether I want to save 50,000 for my Medical Insurance and certain future saving schemes thereby reducing tax or need to spend 49500 by paying 500 tax. It incentivices saving schemes thereby bringing in reduction in conssumption expenditure, finance share market and reduce Inflation to some extent the benefits of which will be hidden in case of Government reducing pay in lieu of tax payment. It brings in the concept of Zagirdhari system of Mughals partially which led to their ruin.

  • #664703
    Do you mean that only other than government employees should pay the tax?

    It can be done as per your opinion. The government should reduce the salary of the government employees first then as per the tax calculations their increments should be done. But that will make them angry.


    " The two most important days in your life are the day when you are born and the day you find out why? "
    – Mark Twain

  • #664706
    What I want is - Irrespective of a government or private company employee, the word Income tax should not bother them. Let the government or private company pay taxes for their own employees without the knowledge of the employee.

    Dr. Subramanyam Swamy, a professor and an expert in economics has suggested that India can/should abolish Income tax for the entire salaried class. It won't affect our economy. The revenue generated through collection of tax from the salaried class is very minimal, and we can afford to bear the loss. We can compensate the loss of revenue through other means.

    No life without Sun

  • #664707
    Income Tax Act is a statute applicable to every citizen in the Country. Under the Income Tax Act there is distinction between Government employee or private employee. The Income Tax is arrived at based on the Salary of an employee. Therefore income tax cannot be derived before fixing the Salary an employee.

    Government has different departments and authorities which regulates various functions. Salary to the Government Employees are disbursed by one authority and the Income Tax administered by another depts.

    "If you don't understand my silence, you will not understand my words"

  • #664709
    This is an interesting issue and bogs down our mind time and again. Govt collects tax from everyone whether they are Govt servants or private workers. Govt also gets tax from self employed people like doctors, lawyers, consultants etc. Then Govt gets GST and other statutory taxes. Govt also gets taxes on transactions of property or securities. So Govt gets revenue from so many places. All this goes to Govt kitty and then Govt spends from it. So Govt will have to think twice before removing any tax including income tax.
    Thoughts exchanged is knowledge gained.

  • #664711
    My question is purely for the salaried class employees only. If there is a will there is a way. Government can amend the orders regarding Income tax collection. All salaried class employees. especially the working class whose salary is fixed and known, can be considered for exemption from paying Income tax.
    No life without Sun

  • #664712
    I raised this question in one of my threads but it is another way around. Why the private employees should pay the tax if they do not rely upon the GOVERNMENT if the private employee gets a Health disease will the government come to rescue as because he paid the tax the answer is simply no.
    Wants are like horses as a rider we need to use the horse halter wisely in order to reach our desired destination safely-- Bhushan

  • #664713
    Reply to #664706
    Tax is a not mere revenue Generating tool for Government. It is a policy decision too. Now even the distinction betwen salaries and Bussiness people(I mean by companies the reference is made to Bussiness class peole) cannot be bought in as again it places salaried people at a different treatment than Bussiness people. Next there is no clear distinction between salary and Bussiness people in this scenario. A person can be employed in a company earn salary and invest a part in shares, Real estate, engage in Absentee Landlordism thereby generating revenue from various sources. Now he has to pay tax for his income in total and not for his nature of income.
    Then what about the points I have given in #664702.
    Here we must under few points.
    1. Neither Tax is a lump sum payment norTax rate is fixed , it changes progessively. Suppose I earn 6 lakhs/year. I must decide whether I want to pay tax for the 1,00,000 which is Rs1000 and do some consumption expenditure for 99,000 or have to invest in some Savings scheme or invest in shares or Insurance thereby saving Rs 1000.
    2. Equally placed people must be treated equally. Irrespective I earn by salary or bussiness I have to pay tax and cannot enjoy Ta free salary. I must be made to realise that Government runs on my money and accountable. I show loyalty to my country.
    3. The title and respone #664694 suggests tax free salary while #664706 suggests TDS. Even in TDS as company or HUF case person must be given the option to decide for himself. The company/Government can pay tax on behalf therby reducing accounting burdern but finally the person must decide his options. So there is no way by which he does not knows about.

  • #664714
    The answer is not No but Yes Government must come to the rescue of any citizen in the country. The inability on part of Government is what its accountability is and we must ensure every citizen gets access to quality and affordable health care. The exact question raised in the response provides answer to itself. This is exactly what is achieved by taxation apart from Generating Revenue. Why must I pay tax when Government does not comes to my rescue in my need. ? This brings in accountability. The answer is better service by Government. The nature of tax is it is one way, non redeemable makes it feel the pain. This is what achieved by taxation policy.

  • #664715
    The tax will be deducted at source by the employer and will be paid to IT department. What I understand from the post is tax free salary to the government employees. It can be done. But the salary fixed should be less by the percentage of tax that he might have paid for the IT department towards IT. But how it can be done and what will be the procedures and rules are to be studied. Instead of that it will be easy for the government to pay salary and the government employees will pay the tax as the other people are doing. That is the reason for uniform code of tax for all the people based on their income. government employees will get income from government and private companies will get salary from their employer but the method of payment of tax will be same.
    Paying tax is mandatory when we are earning some income and that can't be avoided.

    always confident

  • #664721
    This is really an interesting decision and the salaried employees will be happy if no income tax is levied on them. Now the problem is that Govt can not selectively impose or exempt certain categories for income tax. What it can do is that it can abolish the income tax totally and that is a good idea. In that case Govt can levy an expenditure tax or increase the GST to compensate for its revenue shortfall. Govt also needs revenue to run the country and manage its expenditures. Those who are earning will only spend in the market and believing in this doctrine the Govt can get a lot of revenue from expenditure tax or increased GST. So, what Govt can do is to find out how much it is losing by way of vanishing income tax and then transform it to find the new GST rate. The salaried class should not mind it because instead of paying income tax they will pay it on expenses which makes sense. In any case one has to contribute revenue to the Govt kitty.
    Knowledge is power.

  • #664722
    If your suggestion is accepted and implemented, the sufferers will be the middle, lower and poor income class who have less income with no tax liability, but will have to pay heavily for their living.

    No life without Sun

  • #664724
    #664714 Can we move to court even I am taxpayer the government is not coming to rescue me when I am in Ill? Will the Court order the Govt. to rescue me.
    Wants are like horses as a rider we need to use the horse halter wisely in order to reach our desired destination safely-- Bhushan

  • #664732
    #664714. A good thought about tax. Why should an individual pay personal tax? In which way the government spend the taxed money for the tax payer? If an individual owns a house, he pays house tax. For possessing a vehicle, he pays road tax. For electricity and water, we are billed. For any goods bought or food ate in hotels are charged with GST. We pay for medical treatment and for medicines. An individual has to bribe the officials to get our work done.

    While the Government is not caring the individua, why should we pay tax to govt?

    No life without Sun

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