The new tax slabs with increased percentages announced in the budget 2013-14 have come as a shock to the salaried class and more to those professionals who fall in the higher ranges; with this revised regime, the increase in tax payments by these salaried class persons would be substantial.
There are four questions here: (a) why would a salaried employee take extra pains and take more stress to contribute more to a company and to the economy in general and reach a higher position only to find that he has been penalized by way of an excessively higher income tax slab which takes out a major portion of the financial increments he had in the past. This is like condemning a professional and discouraging him not to outperform. Secondly, what is a salaried person getting in return for such high taxes (b) what about other sectors like agriculture, real estate, private clinics etc where income is either not revealed or tax is avoided or no attempt is made to recover tax from such sectors? (c) on the other hand, the corporate tax has been revised downward from 35 percent to 30 percent for all corporate organisations; why? Why are there no slabs here? A company making a $1 million profit could be taxed 30 percent while another making $5 million profit could be taxed 40 percent! Is this not discrimination? (d) Is this because many in the seats have their own businesses and, the reduction in corporate tax would benefit them directly while on individual basis none of these people would be affected as majority of them don't show their income in higher brackets? Is salaried class the only "Bakra" available? Without any prejudice, doubts have been raised whether these acts are based on good faith intention. To remove this doubt, the government should reconsider its decision.