Are you paying more or less tax than 5 years ago?

EY, a consulting firm, evaluated income and expenditure levels of five hypothetical families to estimate who gained or lost how much in the sweeping changes in tax rates and structure (especially GST) since 2014-15. The result of this net tax liability test (direct and indirect taxes were considered) suggests that it’s the upper-middle class that has lost. The richest households are now not only paying more income tax but also more indirect taxes, largely because of the rise in GST on services. Tax liability then & nowHousehold income: Rs 5 lakhTax liability in FY 14-15: 5.7%Tax liability in FY 19-20: 3.4%Tax liability down by: 2.3% 70101256 Lowest-level taxpayers have benefited the most with income tax liability now at only 1/5th of what it was in 2014-15Biggest gainer- Household income: Rs 9 lakhTax liability in FY 14-15: 13.8%Tax liability in FY 19-20: 11.4%Tax liability down by: 2.4% 70101259 Bulk of the gains came from reduction in income tax, but tax on consumption (indirect taxes) rose marginallyHousehold income: Rs 30 lakhTax liability in FY 14-15: 26.6%Tax liability in FY 19-20: 25.5%Tax liability down by: 1.1% 70101265 This group saved on both income tax and indirect taxes. But since their tax liability was higher, the benefits were not so deepBiggest loser- Household income: Rs 60 lakhTax liability in FY 14-15: 30.8%Tax liability in FY 19-20: 32.9%Tax liability up by: 2.1% 70101269 The worst sufferer of tax changes — income tax liability up substantially though indirect tax burden drops marginallyHousehold income: Rs 1.2 croreTax liability in FY 14-15: 35.2%Tax liability in FY 19-20: 36.7%Tax liability up by: 1.5% 70101272 This class is paying both higher income and indirect taxes. Given the high income, the increased tax spend is also the highestNote: Income is gross taxable income before standard deduction or deductions under sections 80C or 80D. Perks not taxable are not included; average tax rate is tax as % of income; GST was implement from July 1, 2017; the estimated tax liability is calculated under certain assumptions which may be different for each individual.

from Economic Times https://ift.tt/30eFZZZ