In modern economies, taxation is essential for the functioning of the government and the development of society. Citizens contribute to the nation through various forms of taxes, which are used to build infrastructure, provide public services, and maintain national security. However, many salaried individuals often feel that they are paying tax repeatedly on the same income in different forms. This perception of “tax on already taxed money” raises important questions about fairness and financial burden.
Tax at the Source: Income Tax on Salary
For salaried employees, taxation begins with income tax. Every month, a portion of salary is deducted as income tax based on government tax slabs. This deduction is mandatory and is calculated according to annual income. After this deduction, the remaining salary becomes the take-home income for the employee.
At this stage, many individuals believe that they have already fulfilled their primary tax responsibility. However, the taxation cycle does not end here.
Tax on Savings and Investments
When the remaining salary is deposited in a savings account, the bank provides interest on the deposited amount. This interest is not considered tax-free income beyond a certain limit. It is treated as “income from other sources” and becomes taxable under income tax laws. Thus, money that has already been taxed once as salary gets taxed again when it generates interest.
Similarly, when individuals invest in fixed deposits, mutual funds, or other instruments, the returns earned may also be subject to taxation. This creates a sense that earnings from already taxed income are being taxed again.
GST on Purchases and Services
When people use their take-home salary to purchase goods or services, they must pay Goods and Services Tax (GST). Whether buying groceries, electronics, clothing, or even paying for insurance policy renewal, GST is applied. This tax is indirect and included in the price of almost all goods and services.
As a result, the same income that was taxed as salary is taxed again when it is spent. Even essential services like insurance policies attract GST, which adds to the financial burden on the taxpayer.
Insurance and Policy Renewals
Insurance is meant to provide financial security and protection. However, when renewing insurance policies such as life or health insurance, policyholders must pay GST on the premium amount. This premium is paid from income that has already been taxed. Thus, people feel they are paying tax again while trying to secure their future.
The Psychological Impact on Taxpayers
Repeated taxation in different forms often creates dissatisfaction among taxpayers. Many salaried individuals feel that despite paying regular income tax, they continue to bear additional taxes on savings, investments, and daily consumption. This can create the perception of an unfair system where the same money is taxed multiple times.
Why Multiple Taxes Exist
Economically, governments impose different types of taxes for different purposes:
- Income tax funds government operations and welfare programs.
- GST is a consumption-based tax that contributes to national revenue.
- Tax on interest or investment returns is treated as new income generated from savings.
Although each tax has its own justification, for common citizens it often feels like repeated taxation on the same earnings.
The Need for Awareness and Policy Balance
Understanding the structure of taxation is important for citizens. At the same time, policymakers must ensure that the tax system remains fair and balanced. Providing more tax relief on savings, reducing GST on essential services like insurance, and increasing tax-free interest limits could ease the burden on taxpayer.
Taxation is necessary for national development, but the experience of paying tax on the same money in multiple stages can be frustrating for citizens. From income tax on salary to GST on purchases and tax on bank interest, individuals often feel financially pressured. A balanced and transparent tax system that considers the concerns of taxpayers will help build trust and encourage responsible tax compliance in the long run.






