Stung by the suit-boot-ki-sarkar jibe and wanting to distance itself from allegations of crony capitalism, levied ironically by those who wrote the manual on it, the Narendra Modi government used every subsequent budget to display its socialist face. In its attempt to get the rich to pay for the poor, the government has gone on increasing the burden on direct taxes on the relatively well-off Indians.
We asked our Budget 2020 knowledge partner EY to run some numbers for us on taxes that different income levels paid 10 years ago and what they pay today. The numbers tell their own story. Taxes at the bottom of the income slab have reduced; the person with ₹5 lakh of gross income used to pay around ₹22,000 as tax in FY11 but today goes tax-free. Those earning ₹12 lakh are better off by about 36% and pay just under ₹65,000 less in personal income taxes in a year. But start going up the income ladder and the taxes rise hugely. At an annual income of ₹55 lakh, you pay an additional 6% tax, at an income of ₹1.5 crore, you pay an additional 14% and at ₹6 crore annual income, you pay a huge 38% more tax.