The paying of income tax by taxpayers has no commensurate benefits for them and this points to a serious lacuna in India’s taxation system. When the financial year ends, the filing of tax returns is a traumatic period for most taxpayers in India. Some of them don’t get anything in return. The individuals are taxed on gross income while corporates are taxed on net income. The education and healthcare sectors consume a major chunk of the budget. Income tax paid by senior citizens and retirees is increasingly becoming a traumatic form of forced charity. India has a population of 4 per cent paying income tax with no commensurate benefits from the government in return. The taxpayers find that their tax payments are squandered in wasteful public expenditure and corruption decided on the basis of populism and vote-bank considerations. The elected representatives continue to enjoy privileges that no taxpayer does. And their perks include free flights, free unlimited first-class train travel, free healthcare, rent-free housing and pension, all paid for by the taxpayers. But why should salaried individuals be taxed on their gross income without deducting the expenses incurred by them, while business income tax is charged on net profit, not on the gross business income?
