A few days ago, I stepped into my neighbourhood vegetable market. Almost every seller had a QR code. These days, very few people pay in cash.
Out of curiosity, I asked one of the vendors, “Do you pay income tax?” He burst into laughter while handing me a seasonal mango. “Woh kya hota hai, didi ji?” I explained, in simple terms, what income tax was. He listened politely but clearly had no idea.
A little further down the market, I asked another seller the same question. This one understood perfectly well what income tax meant. “No,” he replied matter-of-factly. “I don’t pay.”
Neither claimed to be struggling. In fact, both spoke confidently about business being good. They were small traders, certainly not industrialists, but they spoke as though business was doing well.
Of course, not every small trader is legally liable to pay income tax. But the conversations left me wondering about who ultimately bears the most visible and unavoidable tax burden.
I kept thinking about that conversation.
Every July, another group of people dominates conversations: salaried employees. This is the season when tax deductions, returns and calculations become impossible to ignore. And almost every one of them says the same thing.
“So much tax.”
“I could have taken my family on a holiday with this money.”
“I work only to pay taxes.”
It is easy to dismiss such complaints as routine grumbling. But perhaps we should listen more carefully.
Unlike many other groups, salaried taxpayers have almost no room to manoeuvre. Their taxes are deducted before the salary even reaches their bank account. There is no negotiation, no postponement and very little scope to under-report income.
In that sense, they are India’s most dependable taxpayers. Yet they often feel they receive the least acknowledgement.
Paying income tax is only part of the burden. Salaried taxpayers also pay GST on groceries, restaurant bills, household appliances, flights, phone bills and digital subscriptions. Even fuel prices include multiple taxes. Property-related payments involve duties and levies. Tax seems to appear at almost every stage of spending.
Even the money they manage to save for the future is not entirely untouched. Salaried taxpayers carefully set aside part of their income in bank fixed deposits, savings accounts and post office schemes to fund their children’s education, marriage or, most importantly, their own old age. Yet the interest earned on many of these savings is also taxable. For many middle-class families, it creates the feeling that even after paying income tax on their earnings, they continue paying tax on the returns from money they have set aside through years of disciplined saving.
The feeling, rightly or wrongly, is that taxation never really ends. The rising cost of living only adds to the frustration. Healthcare has become far more expensive over the past decade. A single hospital admission can wipe out years of savings for many middle-class families. Health insurance premiums keep rising. Good education is becoming increasingly expensive. Caring for ageing parents often requires substantial financial planning.
These are not luxury expenses. They are necessities. When a significant portion of income is already committed to taxes, many salaried families feel squeezed from both sides. The debate becomes even more emotional when discussions turn to welfare schemes.
Recently, a corporate executive told me something that I suspect many taxpayers quietly feel.
“Some people receive free electricity, some receive pension benefits, some receive cash transfers. We pay taxes that help fund these programmes. But what do we receive?” That question deserves an honest discussion, not an emotional one.
Every democracy needs welfare programmes. They protect vulnerable citizens and reduce inequality. Few would argue against helping those genuinely in need.
But welfare also depends on someone paying for it. That “someone” is often the salaried taxpayer. The issue, therefore, is not whether governments should support poorer citizens. They should.
The real question is whether governments should do more for the people who reliably finance a large part of that support. Could tax slabs better reflect inflation? Could healthcare receive greater tax relief? Could middle-class families receive stronger support for elderly care, education or medical expenses? Could taxpayers see more visible improvements in public services that directly affect their daily lives?
These are reasonable questions. Asking them does not make someone anti-welfare. It simply asks whether the balance is fair. A healthy tax system depends not only on collection but also on trust.
People are more willing to contribute when they believe everyone is contributing fairly and when they can clearly see where their money is going.
India has made remarkable progress in widening the tax base, digitising payments and improving compliance. Those achievements deserve recognition. Perhaps the next step is ensuring that honest taxpayers do not feel taken for granted.
After all, the salaried middle class rarely asks for applause. It simply asks for fairness.
Disclaimer
Views expressed above are the author’s own.
