Background: India has chronic high inflation continuously - we've got seen highs of 10%+ for multiple years between 2000-2010. Over the last 10 years it's averaged at 6%+ mark..
India has chronic high inflation, that affects every one folks. Our costs increase year after year, but salaries don’t keep up and revenue enhancement slabs remain untouched. If our costs are impacted by inflation, it's only fair that income taxes should even be inflation linked. An Appeal with request demanding that tax slabs be reset each year, easing the pressure on lacs of Indians
Our costs increase year after year but salaries don’t keep up the larger mockery, however, is that even taxation slabs remain untouched year after year. this is often criminal to mention the smallest amount.
In last 10 years, whether or not we disregard the intermediate slabs, just the highest most slab by staying static has led to additional tax outgo of 13.91 Lacs for salaried individuals. This amount will only increase year after year and in fact grow during a compounding manner.
Rationale for Ask:
If our costs are impacted by inflation, it's only fair that income taxes should even be inflation linked
Indirect taxes are inflation linked - year after year costs increase and taxation outgo from our pocket increases, keeping tax slabs un-linked with inflation may be a double whammy on salaried class
Inflation is anyways severely underestimated for Salaried Class. CPI has 36% weight for Food, 21% for Housing, 5% for Health and 5% for Education. While this sounds reasonable for people exempt from revenue enhancement, anyone within the 10 Lac slab have way more expenses on Housing, Health and Education. Those 3 dimensions became way more costlier for Salaried Class which is severely under reported in CPI.
Ask from GOI: revenue enhancement slabs to be reset each year on the idea of CPI stats published by GOI
NB: For sake of simplification, 4% cess has been employed in calculations, it wont to be 3% before 2018. Additionally, beneficial changes made to lowest slab in 2018 has been disregarded - at the identical time impact of inflation on lower slabs has also not been considered which quite balances out the analysis.
must be to get some relief to tax payer