New Delhi: Salaried people in India pay taxes on nearly every step, including income, spending, investing and even savings. This is the analysis of CA Nitin Kaushik, who has in a financial thread broken down India’s tax system that impacts the middle and upper middle classes.
Taking to X, chartered accountant Nitin Kaushik highlighted how India’s tax system taxes people at almost every step. He titled the post “India’s Silent Tax Drain: You Pay More Than You Think”. In the post Nitin wrote, “A salaried individual in India doesn’t just pay income tax. They pay taxes on income, on spending, on investing — and sometimes, even on saving.”
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In a series of posts on X, Nitin has provided a breakdown of the real tax burden faced by middle-class people in India.
_ India’s Silent Tax Drain: You Pay More Than You Think _
A salaried individual in India doesn’t just pay income tax.
They pay taxes on income, on spending, on investing – and sometimes, even on saving.
Here’s a breakdown of the real tax burden faced by upper-middle-class_
— CA Nitin Kaushik (@Finance_Bareek)
“Buying a car? Up to 50% of the price = taxes,” Kaushik posted. He said that cars are subject to a 28 percent GST and a 22 percent Cess, especially for SUVs and sedans. “Up to 45% of the cost is tax. And you’re likely taking a car loan, meaning you pay EMI on both the car and the tax,” he wrote.
Nitin points out that homebuyers are not in a good situation either. For under-construction flats, GST is 5 percent on the base cost, stamp duty and registration charges range from 6–7 percent. GST on other charges is clubhouse, parking and maintenance fees that are taxed at 18 percent. The effective tax outflow is up to 16 lakhs. “All from your post tax income (after already paying 30% income tax),” he noted.
Nitin’s “bigger picture” pointed to the salaried individuals earning around Rs 25 lakh annually. These people are subject to a 30 percent income tax slab. They pay taxes on cars, homes and insurance. They pay GST on goods and services and taxes on STCG, LTCG, dividends and EPF.
“India has progressive income tax, but regressive consumption tax,” he says. “The more you buy, the more you’re taxed — even after paying income tax,” he wrote. He claims that the middle and upper middle class salaried people are most affected. These people don’t enjoy exemptions, don’t evade taxes and rarely get credit for being “honest taxpayers”.
Nitin has proposed reforms like input tax credits on EVs and homes, lower GST on essential spending, tax rebates for consistent TDS filers and rational double taxation on income and spending.
Nitin concluded his post by saying, “This is not about tax evasion. It’s about awareness and policy balance. India needs to grow-and taxes fund that growth. But over-taking salaried earners weakens both savings and consumption.”
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