Personal income tax and corporate tax together called as direct tax provided 51.3% of India’s revenue in 2017. The rest of the revenue was formed by indirect taxes. With the implementation of Goods and Services tax in 2017, the whole tax structure was reorganised. GST forms around 28.46% of revenue, personal income tax provides 25.3%, corporate tax gives 24.67% and excise provided 15.11%.
FY stands for Fiscal Year. The digits following it represents the year when the fiscal year ends. For example, FY22 starts from July 1,2021 and ends on June 30,2022. The government was expecting a tax growth rate of 8.7% but there was a rise to 14.9%. The net tax revenue for FY21 is estimated at ₹13.44 lakh crores while that of FY22 is estimated at ₹15.45 lakh crores.
What is Union Budget
The Annual Financial Statement or the Union Budget of India is the annual budget of the Republic of India as mentioned in Article 112 of the Indian Constitution. It is classified into Revenue Budget and Capital Budget.
Revenue receipts and revenue expenditures come under the revenue budget. Tax and non-tax revenues are the two types of revenue receipts. Revenue expenditure includes the various day-to-day expenses for the year and the expenses for providing various services by the State to its citizens. If the expenditure is more than the revenue receipts then a revenue deficit will be faced by the government.
Capital Budget includes capital receipts and capital expenditure. As the name suggests, capital expenditure is the amount spent by the government on machinery, buildings, hospitals, education etc. Capital receipts include public loans, foreign governments and RBI. If the government’s total expenditure exceeds its total revenue, a fiscal deficit is incurred.
How is the tax money spent
The union budget is submitted by the Finance Minister by February 1 of every year. Forbes India did a research and came to the conclusion that out of every 1 rupee earned by the government, borrowings and other liabilities were the highest source of income as they provided 36 paisa, next came GST which consisted of 15 paisa, income tax was the source of 14 paisa, while corporation tax provided 13 paisa; next was union excise duties with 8 paisa followed by non tax revenue with 6 paisa, non-debt capital receipts provided 5 paisa and lastly, customs was the source of 3 paisa of every rupee earned by the Indian government.
Any citizen has a reason to know how the tax that he pays is getting spent. According to a survey by Forbes India on Budget 2021 – How India Spends its money, out of every rupee India earned, 20 paisa was paid as interest payments, states’ share of tax and duties comprised 16 paisa, central sector schemes got 13 paisa, 10 paisa was paid off as other expenditure, finance commissions and other transfers got 10 paisa, schemes sponsored by the Central Government as well as subsidies takes up 9 paisa each, 8 paisa is spent for defence of the nation and the rest 5 paisa gets spent for pensions.
Should we pay tax at all
In the US, every working man is supposed to pay tax while in India those who earn less than 2.5 lacs annually are not required to pay income tax. Like that, some exceptions are made. This, while providing an advantage to those having low income, puts a burden on all those who are paying taxes. In a simple comparison, it can be deciphered that an average tax-paying man in India pays twice the amount than an average tax-paying man in America.
If an American pays ₹2 lacs to the American government, an Indian pays ₹4 lacs per year as income tax, supposing that both of them earns the same amount of income per year. Hence each person would have to pay lesser tax in India if income tax was to be paid by every working Indian.
I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.
If you are interested in participating in the same, do let me know.
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We also have a Facebook Group Restarter Moms for Mothers or Women who would like to rejoin their careers post a career break or women who are enterpreneurs.
We are also running a series Inspirational Women from January 2021 to March 31,2021, featuring around 1000 stories about Indian Women, who changed the world. #choosetochallenge
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