Income Tax and I
With every passing year of my employment, the 10%-15% increase in my salary was offset by inflation that hovered around 8-9%. So in real terms the increase was just 2-6%. And then some expenses had no link to inflation; they just increased, likes of fuel cost, education fee and medical expenses and insurance premiums (under the pretext of increasing financial risk). Further, I had accessibility to credit cards and personal loans.
I use to pick up on naive questions on wealth creation by friends and family members and explain them that in real terms most of us may never create wealth in our lives. Yes, at the outset not a statement expected from me, who claims to me running (was) the finances of a Company as well. Personally, I had two contrasting views about my financial health:
a. I am not doing well enough and hence I need to earn more.
b. I am rich enough and better than many but…..
Today, on 70th Independence day of my country, I am proud about myself.
I reviewed the Income tax Statistics released for first time in last 10 years by Government of India. I am proud that I feature amongst top 3% of 100 cr individuals in India who filed tax returns. Then my head rises further, looking straight into the sky when I feature amongst 0.43% of total tax payers with a particular salary level (Salary bracket not being disclosed to avoid IT raids).
Roughly 5 lakh individuals in our country earn salaries greater than Rs 17 lakh p.a. But then this has no correlation to the lifestyle evident.
I reason to myself, ” People have ‘other sources’ of income as well.”
I felt, may be the reason for I still being without a big car, a luxurious flat and devoid of annual holiday trips abroad is ‘Other’ sources. But the statistics for ‘Other sources’ of income and ‘Income from House property’ was equally dismal.
My elite ranking did not fall much.
I am waiting for more such data to be accessible to ‘We Indians’ but till then it’s either of the situation with me:
a. I am richer than I believe ; or
b. A revised version of statistics is expected from Income Tax department regretting the error in publishing number of income tax returns.
(Note: The statistics released for Assessment year 2012-13 so may be in Present Value terms, I am earning far less and my reasoning for NOT creating real wealth holds true.)