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Just to remind.. How much we pay for buying an item worth Rs 1000 😀😀😀
Assume that I need to buy an item of base price of Rs 1000.
Assume it attracts GST @18%
I will need to pay Rs 1000 + Rs 180 = Rs 1180 for that item.
Now, I need to earn Rs 1180 first, to be able to pay this amount.
Assume that I am in the 20% Income Tax bracket (income between Rs 5 Lakhs and Rs 10 Lakhs per year).
If I earn Rs 1486.15, then I will have to pay Income Tax of Rs 297.23 (@20%), and a Cess of Rs 8.92 (@3% of the Income Tax), and that will leave me with an earning (after Income Tax) of Rs 1180.
Hence, to buy an item of base price Rs 1000, I need to earn Rs 1486.15.
Which means that I pay Rs 486.15 in taxes on the purchase of an item of Rs 1000.
And that, dear people, implies a tax of over 48.6% paid overall (through both direct and indirect taxes).
Now, this figure will be far higher for items in the 28% GST slab. (It will be 61.2% in total taxes).
And that, friends, is the real cost of money to you.
Don't get fooled by the numbers thrown at you from so many different directions. 😈😈😈😈
