Relation of taxes with income groups

Income Tax Slabs in India are announced by the finance minister every year. This year, finance minister Nirmala Sitharaman announced the Union Budget 2023 on 1 February 2023.

The latest budget has introduced certain changes to the existing income tax slab. The finance minister announced that under the new tax regime, the rebate for income tax had been increased to Rs.7 lakh from the earlier limit of up to Rs.5 lakh. There were also certain changes under the tax slab for the new tax regime. Apart from that, the surcharge rate on Income of Rs.5 crore and above has decreased from 37% to 25%.

How do the wealthy evade taxes?

The rich and wealthy are infamously known for leeching off the working class and making money in shady ways. But in this case, they are able to legally evade taxes by finding loopholes in the system and working on them. 

They mainly hold their wealth in the form of real estate or stocks as they are only taxed when they sell them. They don’t keep their money in banks or make it readily accessible to the public. Example- Jeff Bezos has to pay almost 0% tax as majority of his wealth is in the form of Amazon stocks.

The wealthy live off loans to evade taxes as borrowed money is not taxable and not considered as income. They use their large stock reserves to get huge loans to fund their lifestyle without having to pay a penny to the government. Elon Musk, the CEO of Tesla has famously claimed that he takes out loans with his stocks as collateral. 

Most affluent individuals own large charities and organizations where they claim to give back to society. Not all of them have the greatest interests at heart as this trick has been used since decades to avoid taxes. 

Wealthy people hire lawyers who specialize in avoiding high taxes and preserving their assets. These lawyers take a gigantic cut, but they make certain that their clients don’t lose money in taxes.

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