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A study conducted by TaxSpanner brought up some interesting tax paying trends amongst Indian taxpayers:
- The Gender based Tax Ratio Composition indicates that females (Average Income = Rs. 5L) are paying lesser tax than males (Average Income = Rs. 6L) due to lower tax slabs and better investments.
- Percentage of females having “0%” and “upto 5%” tax ratio is quite high as compared to their male counterparts.
- Females in Chennai are better tax planners as even at an average income of Rs. 4 Lac, their Average Tax Ratio is only 2%.
- This is followed by females in NCR (Average tax ratio=3% at average income= Rs. 4 Lac) and females in Bangalore (Average tax ratio=4% at average income= Rs. 5 Lac)
- Males in NCR have a better tax ratio of 5% at an average income of Rs. 6 Lac.
- Males in Bangalore have the worst tax ratio of 8% at an average income of Rs. 8 Lac.
- Even though the salaried employees in Mumbai are earning 40% more than their counterparts in Chennai and NCR, they are paying lesser tax on incremental basis.
3. House Ownership:
- The Average Tax Ratio of a house owner is high as his average income (Rs. 11 Lac) is also high, as against that of a non house owner (Rs. 5 Lac)
- Among those having an income below Rs. 5 Lac, only 6.8% own a house. Also, only 20% house owners are below 30 years of age. This indicates that there are only a few people who recognize owning a house as a smart investment and tax planning option in the beginning of their career.
- At 40% Bangalore has the highest number of house owners followed by Hyderabad at 17%
- Interestingly, the largest percentage of house owners is in the age bracket of 31-35 years at 42%
- Percentage of house owners in the age group 21-30 is 20% with 21-25 contributing only 1%. This percentage can be improved with careful tax planning.
- While one third of salaried individuals earning up to Rs. 5 Lac pay ZERO tax, the Average Tax Ratio of the remaining two third is 3%.
- Salaried individuals in NCR and Bangalore pay lower tax as compared to their counterparts in other cities.
- Average Tax Ratio of salaried individuals earning Rs. 5 to 10 Lac is 9%, however there are only 0.6% people in this category with “0%” Tax Ratio.
5. Self Assessment Tax
- About 4% of salaried individuals have paid an average amount of Rs. 15,000 as Self Assessment Tax.
- As many as 57% of salaried individuals could have avoided paying Self Assessment Tax by informing their employers about having another Form 16.
Click here to understand the tax returns filing trend observed among Indian taxpayers.
1. Self Assessment Tax