R2I Chapter 7.1. Musings on being awarded “Silver Certificate of Appreciation” by Indian Income Tax Commissioner

My Return to India (R2I) story > R2I Chapter 7.1 

Indian personal income tax rates are among the highest in the world. Although the rate of Taxpayer compliance in a country of 1.4 billion people is rather lax with many individuals hiding their income as ‘Black money,’ the salaried class can’t generally evade taxes. This is because organizations are required to report the salaries paid to employees and are incentivized to do so since their corporate taxes can be reduced proportionately.

Those earning salaries of more than 10 or 15 lakhs a year generally max out the standard deductions and exemptions that are designed for lower income earners. Therefore, I like thousands of others had to pay over 30% Tax on my Income. For my contribution to the economy, the Income Tax department has been awarding me with a “Silver Certificate of Appreciation” for the past couple of years.

The Indian government issues those paying an annual Income Tax of ₹1-10 lakh a ‘Bronze’ certificate, and to those pay between ₹10-50 lakh in Taxes, a ‘Silver’-certificate; and those paying taxes between ₹50 lakh and ₹1 crore are awarded a “gold” one. This is a purely symbolic gesture since it doesn’t confer any benefits on the awardees.

I scratch my head wondering about government services “silver” taxpayers like me can expect in return for the lakhs I pay in IT, property-tax, and GST. Our son, like millions of other kids, goes to a private school with no government aid. I don’t expect to patronize the overstretched public health system, thanks to my medical insurance and corporate health-package. This leaves the basic public services that government is expected to provide. For instance, after the street in front of my home was dug up for months for some public drain-work, I sent several tweets, emails and calls to the local councilor’s office that went unanswered. Only an impending local election miraculously speeded up the work.

While reflecting on the “Silver Certificate of Appreciation” from Indian Income tax, it would be worth mentioning that those of us paying high-taxes are truly privileged. We do so because we earn top rupees, in a developing country where the vast majority of white-collar working class still earn 20-30 thousand rupees a month and the blue-collar workers and daily wage earners make less than 3-400 hundred rupees a day (about $4-5 a day) in urban India.

The message here is simple: if you plan to return back to India and work as a salaried employee, be prepared for the high rate of personal Income Tax.

Also of interest - My article in The Hindu Businessline - Musings of a ‘Silver Certificate’ taxpayer