With reference to the article "Talking about income inequality" (August 25), it is surprising the writer has concluded that the income inequality in India is similar to that in Germany and France. The dismal level of income tax compliance in India is an open secret. According to the report released by the finance ministry, the estimated number of taxpayers for the financial year 2011-12 was only 32.4 million - less than three per cent of the population. Of these 32.4 million people, 89 per cent pay taxes in the under Rs 5 lakh slab and only 1.3 per cent are listed as earning more than Rs 20 lakh.
Until the year 2000, the All India Income Tax Statistics used to provide category-wise statistics. This practice has been discontinued. According to those figures, there were 930 non-salaried people above the Rs 25-lakh annual income level. Yet, one would expect that industrialists, actors, cricketers, surgeons, lawyers, chartered accountants, architects, tax consultants etc would come under this income bracket. It is evident that number of people in the high-tax bracket is abysmally low. Therefore any conclusion drawn about income inequality would be far from reality.
Amit Purohit Bengaluru
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number
