Half of urban Indians follow the budget, and many more agree it impacts their personal finances

Half of urban Indians follow the budget, and many more agree it impacts their personal finances

YouGov’s latest survey shows sentiments of the public around income tax and reveals their expectations from the upcoming budget

Ahead of Budget 2022 which will be presented by the finance minister Nirmala Sitharaman on 1st February 2022, data from YouGov’s latest survey reveals three-quarters (74%) of urban Indians agree that income tax is important for the country’s economic development.

Out of the surveyed respondents, currently, 55% claim to pay taxes while others do not. Among these taxpayers, three in five (75%) agree to happily pay their income tax without any enforcement.

Having said that, nearly two-thirds (65%) of them are unhappy about the current tax structure in the country and a higher proportion (77%) feels the tax structure should vary depending on a person's economic status.

Data shows that about half of the urban Indians follow the union budget every year (47%) and close to three in ten (27%) follow it sometimes. Furthermore, two-thirds (67%) claim the budget to have an impact on their personal finances. Respondents who self-identified as middle class or upper-middle class are most likely to both follow the budget and believe it has an impact on their personal income. People who self-identified as poor and/or rich, tend not to follow the budget and believe it has a lower impact on their personal incomes.

80% of the self-identified poor respondents think a tax rate of 5% is fair for them to pay while 25% of the rest agree on a tax rate of 10% as fair for them to pay. 

When asked about their expectations from the upcoming budget, almost two in five (38%) urban Indians said they expect the government to raise the income tax exemption limit to ₹5 lakh from the current one. This was the leading expectation for people who identified themselves as poor or middle class.

About three in ten (31%) feel that the overall tax exemption limit should be increased from the present 1.5 lakhs, while a higher number (32%) wants the government to ease the tax burden on the salaried class by increasing the limit of the standard deduction from the existing Rs 50,000. Those aged 40 and above are most likely to have these expectations as compared to the younger age groups.

Keeping the pandemic and rising medical expenses in mind, more than a third (35%) expect the Covid treatment-related expenses to be made a separate item under tax deductions, while some (30%) expect the finance minister to increase deductions for medical expenses under 80D.

Increased tax deduction on housing loan interest is also an expectation of the salaried class in India. Interestingly, millennials (32%) are most likely to expect this tax incentive as compared to Gen X (28%) and Gen Z (19%).

Paying income tax is a legal obligation for citizens of the country but there are some professions (like farmers) that are currently exempted from paying income tax. When asked about different professions that should come under the ambit of taxation, about six in ten (60%) urban Indians feel farmers should not pay any taxes, whereas 35% feel they should be taxed like all other citizens.

Likewise, in the case of armed forces, half of the respondents in India feel that they should be exempted from paying taxes, while 44% believe they should be subjected to taxation. As in the case of police (64% vs 25%) and doctors (65% vs 17%), the numbers are higher for those who feel they should be paying similar taxes as all citizens as compared to those who feel they should be paying no taxes.

Whereas for businessmen, that is thought to be the richer class in India, more than half (51%) of the respondents are of the opinion that they should be paying a higher income tax than other citizens. Comparatively, a lesser proportion feels that they should be paying the same tax as all citizens (37%) or should be paying no taxes at all (12%).

YouGov Omnibus data was collected online among 1022 respondents in India between Jan 18th-21st, 2022 using YouGov’s panel of over 15 million people worldwide. Data is representative of the urban adult population in the country.

 

 

 

 

 

 

 

 

 

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