Thu Jan 16 09:54:30 UTC 2025: ## Middle Class Shouldering Disproportionate Tax Burden, Ahead of Budget: Analyst

**NEW DELHI** – As India’s budget approaches, concerns are mounting over the heavy tax burden borne by the middle class, particularly salaried individuals. While the number of individual tax filers has more than doubled since 2013-14, a significant portion file zero-tax returns, indicating a small segment carries the majority of the tax load.

Analysis reveals a widening gap between personal and corporate income tax collections. While corporate tax rates were significantly reduced in 2019, resulting in an 83% increase in collections (from Rs. 5.56 lakh crore to Rs. 10.2 lakh crore between 2019-20 and 2024-25), personal income tax collections surged by 141% (from Rs. 4.92 lakh crore to Rs. 11.87 lakh crore) during the same period. This has led to a shift in the personal income tax (PIT) to corporate income tax (CIT) ratio from 0.7x to 1.1x.

Furthermore, the majority of Goods and Services Tax (GST) collections, estimated annually between Rs. 18 lakh crore and Rs. 20 lakh crore, are believed to stem from individuals, despite the lack of official breakdowns. High GST collections are concentrated in urban areas, where the middle class is predominantly located, with five states (Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Uttar Pradesh) accounting for over half of the total.

Illustrative examples highlight the significant tax burden: an individual earning Rs. 10 lakh could face a tax outgo of 16-20% of their income, depending on savings; this rises to 25-31% for a Rs. 20 lakh earner and 40-47% for a Rs. 1 crore earner, considering both direct and indirect taxes.

Political strategist and commentator Amitabh Tiwari argues that the middle class, facing stagnant wages and low savings, is being unfairly burdened. He advocates for tax relief measures, incentives for major purchases like vehicles and homes, and greater tax parity with corporations. The upcoming budget is seen as a crucial opportunity to address these concerns.

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