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Some stats on Income tax payers from India : "Data shows only 1% of population pays income tax, over 5000 pay more than 1 crore ($145K USD)" Only "six individ

by chdir 10y ago

Some stats on Income tax payers from India : "Data shows only 1% of population pays income tax, over 5000 pay more than 1 crore ($145K USD)" Only "six individuals fell in the high-end earning bracket of Rs 50-100 crore (7-14 Million USD) of salary income." Wow ! Just 6 individuals. India's got NO shortage of millionaires & billionaires. The abysmal income tax collection clearly indicates a gaping problem with rules & their implementation. - Source : http://indianexpress.com/article/india/india-news-india/data-shows-only-1-of-population-pays-income-tax-over-5000-pay-more-than-1-crore-2779065/ http://indianexpress.com/article/india/india-news-india/data...

tomp 10y ago
Judging from experience from other countries, people don't become billionaires by earning income (but rather by growing capital). I think it's unfair that income is the primary base for tax, not capital, but that's life.
- mangamadaiyan 10y ago
  Honest question: isn't the growth of capital also an income? And if it is, it should get taxed, no?
  - antisthenes 10y ago
    Growth of capital is not an income, because it is subject to uncertainties in valuation and depreciation. Income is usually measured in a set amount of currency, and is generally perfectly liquid, while capital can sometimes only be valued if there's a buyer. So no, it is not also an income. This is one of the most common misconceptions here on HN (I often see wealth and income used interchangeably)
  - a3camero 10y ago
    It's usually taxed when its sold, rather than when the increase in value happens. More info: https://en.wikipedia.org/wiki/Capital_gains_tax https://en.wikipedia.org/wiki/Capital_gains_tax
  - tomp 10y ago
    Besides the points raised by other two commenters, the difference is also that capital gains (i.e. income from liquidating capital) is often taxed at different (lower) rates than job income. I think that't patently absurd, but I guess our world works according to the "might is right" principle.

by chdir 10y ago

tomp 10y ago

Judging from experience from other countries, people don't become billionaires by earning income (but rather by growing capital). I think it's unfair that income is the primary base for tax, not capital, but that's life.

mangamadaiyan 10y ago
Honest question: isn't the growth of capital also an income? And if it is, it should get taxed, no?
- antisthenes 10y ago
  Growth of capital is not an income, because it is subject to uncertainties in valuation and depreciation. Income is usually measured in a set amount of currency, and is generally perfectly liquid, while capital can sometimes only be valued if there's a buyer. So no, it is not also an income. This is one of the most common misconceptions here on HN (I often see wealth and income used interchangeably)
- a3camero 10y ago
  It's usually taxed when its sold, rather than when the increase in value happens. More info: https://en.wikipedia.org/wiki/Capital_gains_tax https://en.wikipedia.org/wiki/Capital_gains_tax
- tomp 10y ago
  Besides the points raised by other two commenters, the difference is also that capital gains (i.e. income from liquidating capital) is often taxed at different (lower) rates than job income. I think that't patently absurd, but I guess our world works according to the "might is right" principle.