Budget 2025 shifts the tax burden to under 1% of people

While #Budget2025 offers much-needed relief for the #MiddleClass, it quietly shifts the direct taxation burden to less than 1% of the population.
As per AY 2023-24 data, only 1 crore individuals reported salary incomes above Rs 10 lakh. Assuming they received increments and now their salaries are over Rs 12.75 lakh cut-off, this translates to a mere 1% of India paying personal income tax.

Why Is This Alarming?
- For the #Government:
✅ If India aims to become a superpower, income levels must rise and more people need to enter the formal workforce
✅ Such a tiny tax-paying population can't sustain the country’s ambitions for prosperity
- For #Individuals:
✅ Democracy Favors the Majority: Governments cater to the majority because votes matter. The 1% may cry, but the government would continue to ignore and keep increasing tax burdens
✅ Higher Scrutiny: With fewer taxpayers, the IT department will naturally focus more on these individuals. Brace for more scrutiny!
✅ Consumption Taxation: This 1% also fuels consumption of luxury/premium goods with higher GST rates (18-28%).

What Can the Government Do?
🛠️ Increase Salaries: The Economic Survey highlights the widening gap between corporate profits and employee wages. The government needs to intervene and bridge the gap at least to some extent. Read more about this here - https://lnkd.in/gddWvu5x?
🛠️ Exclusive Perks: Provide some tangible benefits to incentivize and retain this small but crucial taxpayer base:
- Fast-track access at airports, passport offices, and government services
- Home-based services: Allow appointments for government services with home visits by officials
🛠️ Rationalize Surcharge/Taxes - The surcharge limits haven't been changed for years now, inflation, what's that! Similarly, the interest earned on EPF contributions above Rs 2.5 lakhs in a year is taxable lifelong! Recalibration is needed to represent the right status

If the government doesn't act swiftly, we may witness a troubling trend of HNIs and top professionals relocating to other tax-friendly countries.

The government needs to act fast, burdening a small population with excessive taxation is not good for the economy!

Source of the data - https://lnkd.in/gFzyHaT9