A large section of the Indian middle class who are made to pay taxes through their nose are essentially bereft of any social security unlike their peers in the West. Like in case of 38-year-old Gurgaon-based Sameer Chatterjee (name changed) – an MNC executive -- who despite paying his taxes is bereft of any government benefits on healthcare or other social sector advantages.
If one compares his outgo to the government in terms of taxes vis-à-vis the facilities he gets, he is simply has no social security. Chatterjee earns a salary of Rs 3.70 lakh a month. Of this, after accounting for the investments and home loan deductions, Chatterjee pays a whopping Rs 12.5 lakh taxes to the government.
Despite shelling out mega taxes, he had to fork out another Rs 20,000 treating his food pipe ulcer in the wake of the mid-night medical emergency. In December last he had to be ambulated to a nearby hospital with extreme nausea and stomach pain in the dead of the night. Chatterjee was diagnosed with food pipe ulcer – an ailment which burnt a hole in his pocket.
Apart from the income tax another, component of additional taxes that eat into his disposable income are value added tax and service tax every time he ventures out for culinary indulgence. It costs almost Rs Rs 1,000 a month. Service tax, meanwhile, is a ubiquitous presence on all his utility bills now. The medicines that he buys force him to pay additional excise, and sales tax in addition to the VAT. So he pays at least five types of taxes to the government of India.
His wife says, “Even after paying taxes diligently, we do not have appropriate medical facilities governed by the state.”
Now compare this with a similar situation faced by an Indian Journalist working for a German media house in Bonn, Germany. I was admitted in a hospital due to fever. All that I had to pay was ten Euro, which included the entire charge from consulting to pathology. The fee was valid for a period of three months. I did not have to pay a penny from my pocket,” Vishwa Deepak told dna. Back in Gurgaon, 75-year-old Saba’s daughter rues the cruelty the old aged tax payers are facing. “My mother earns a pension of Rs 67,000 and earns from property also, on which she duly files an income tax in the range of 30,000 annually. Still she had to shell out Rs 40,000 to treat her spondylysis and cervical, including the physiotherapy charges. The point is we are being taxed at every step but getting nothing in return,” she said.
Now consider this. In 2011-12, the government of India had foregone corporate revenue worth Rs 61,765 crore almost a fifth of the Rs 3,22,816 crore aggregate corporate tax collection in the year. In the current financial year, the Central Board of Direct Taxes has projected a Rs 4,51,005 crore corporate tax collection. Meanwhile, personal income tax collection has been projected at Rs 3,00,000 crore. An answer to the situation lies essentially in broad basing the tax base. People are now looking forward to finance minister Arun Jaitley for addressing their concerns in his budget.