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What is Tax Ratio?

June 24, 2016 by Sudhir Kaushik

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TaxSpanner’s vision is to empower every individual to gain the advantage of being actively involved in his/her financial life. An individual’s tax return mirrors one’s financial affairs. The understanding of your financial lifestyle starts with your tax return. We believe that if one is able to understand and prepare one’s tax return independently, half of the battle of financial well-being is already won. The rest of the battle can be won by understanding the Tax Ratio and implementing the best practices in tax-efficiency, as applicable to your scenario.

What is Tax Ratio?

Tax Ratio is the most powerful indicator of the tax efficiency of an individual. Tax ratio is the percentage of your salary that you pay as tax. To put it differently,
Tax ratio = Tax paid / Gross salary
For e.g. If your Gross salary is Rs. 5 lakhs and Rs. 50,000 got deducted from it as TDS, your Tax Ratio is 50000/500000 = 10%. Go ahead! Calculate your tax ratio and how it can help you save thousands or lakhs.

Filed Under: Tax Refunds

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