Chartered Accountant Nitin Kaushik recently broke down how salaried Indians are taxed at every turn, from buying a car to investing in mutual funds.
According to Kaushik, taxes on a car can be as high as 50% of its price, including 28% GST and a cess of up to 22%. For example, the total taxes on a ₹20 lakh car can be ₹9 lakh, pushing the on-road price to nearly ₹29 lakh.
Buying a flat also comes with multiple taxes:
- GST of 5% on under-construction flats
- Stamp duty and registration fees ranging from 6% to 7%
- GST of 18% on clubhouse access, parking, and maintenance fees
Kaushik argues that this system, with its progressive income tax and regressive consumption tax, disproportionately burdens the salaried middle and upper-middle class. Unlike business owners, salaried individuals have few options for exemptions or deductions.
To address this issue, he proposes reforms such as:
- Input tax credits on electric vehicles and homes.
- GST relief on essential spending.
- Tax rebates for consistent tax filers.
- Rationalizing the “double taxation” on both income and spending.
Kaushik believes that over-taxing this group weakens both their savings and their ability to consume, highlighting the need for a more balanced tax policy.