According to Roy, everyone who pays income tax in India belongs to the wealthiest segment of the population, making it misleading to call them “middle class.”
He explained that the government’s decision to lower the tax burden comes at a cost of ₹1 lakh crore to the national treasury. However, this change has made the tax system more regressive, and it now favours the rich more than before.
Previously, a person had to earn 3.5 times the national per capita income to start paying income tax. Now, they need to earn six times the per capita income. This means that only the top 5-10% of the population is liable to pay income tax, further reducing the tax burden on the wealthy.
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At the same time, indirect taxes such as goods and services tax (GST remain high. Since both rich and poor pay these taxes equally, the proportion of taxes paid by lower-income groups has increased.
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“It will increase consumption of you and me. It is going to do nothing, absolutely nothing for consumption of the aam aadmi,” said Roy.
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