Posted on March 5, 2008 - by rdilipk1

Tax system and structure

What is the impact of taxes on the general public? How does the tax structure affect the middle class? How is it that a layman would realize this?’, ‘

I have been a tax payer from the 3rd year that I started to work. I used to pay 20% of what i earned in the first 2 years and then 30% of my earnings since the 3rd year of my career. Appraisals would not make much of a change to my salary because a more that proportionate amount would be deducted as TDS (tax deducted at source) and when I get my salary, the amount would be much like what I was getting normally.

Every financial year end would see a harakiri – a hasteful run to invest in whatever options possible and as much as possible so that I save something at least. But even after investing till the prescribed limit, which was not too much and was the maximum that I could when I end up paying 30% of my hard-earned money as Income tax, there would be a pinch somewhere in my heart and a pain, more so when I see that I don”t even get the basic facilities that I deserve from my government.

With the new Income tax structure being announced I sat down to calculate how that would impact my financial freedom and I was surprised to see that it actually made a huge impact on the net income that I earned. Though the changes overall in the tax structure was not too much, the net impact was huge. this is when I realized as to what is the impact that the tax has on me.

It is true that we ignore many a things just because they are tiny and small and not worthy of a thought. But we do not realize that these small things actually has a vey large impact on our lives and is omething that needs much more attention and consideration.