Taxes are needed for running a country. They fund roads, schools, hospitals, and defense. But when people feel taxed again and again for the same activity, frustration grows. This is what is called multiple taxation.
Recently, AAP MP Raghav Chadha spoke in Parliament about how citizens are paying tax at every step. His speech captured the feelings of many Indians who see a new tax every time they earn, spend, or even travel.
You can also watch the full speech here: YouTube Video – Raghav Chadha on Multiple Taxation.
What Is Multiple Taxation?
Multiple taxation means you pay different taxes on the same money or activity. For example:
- You earn income and pay income tax.
- You buy a car from your post-tax income and pay GST on it.
- You register the car and pay road tax.
- You insure the car and pay GST on motor insurance.
- You buy fuel and pay excise duty and VAT.
- You drive the car on a highway and pay toll tax.
The same income is taxed at every stage.
Multiple Stages of Taxation in India – Example: Car Ownership
| Stage | Tax / Charge Type | Who Pays | How it Works | Example |
|---|---|---|---|---|
| 1. Income | Income Tax | Salaried / Self-employed person | Before buying a car, you pay income tax on your salary or business income. | If you earn ₹10,00,000, you may pay ~₹1,17,000 tax (old regime, no deductions). |
| 2. Car Purchase | GST on Car Purchase | Buyer | Cars attract GST (18%–28%) + Cess depending on type (SUV, luxury, etc.). | On a ₹10 lakh car, GST + Cess may add ₹2–4 lakh extra. |
| 3. Road Tax / Registration | One-time Road Tax + Registration Fee | Buyer | State govt. charges road tax for lifetime (10–15 yrs) use of car, plus RTO registration. | Road tax may be 10–15% of car’s value = ₹1–1.5 lakh extra. |
| 4. Fuel | Excise Duty + VAT + Dealer Commission | Every car owner | Every litre of petrol/diesel includes heavy taxes (40–60%). | Petrol at ₹100/litre → only ~₹40 is base price, rest is tax. |
| 5. Toll Charges | Toll Tax on Highways | Drivers using highways | Pay for using national/state highways with FASTag/toll booths. | For a 200 km trip, you may pay ₹300–₹500 in tolls. |
| 6. Car Maintenance | GST on Servicing & Parts | Car owner | GST of 18% is charged on servicing, spare parts, accessories. | Servicing bill ₹10,000 → ₹1,800 GST. |
| 7. Insurance Premium | GST on Insurance Premium | Car owner | GST @ 18% is applied on motor insurance premium. | Insurance premium ₹20,000 → ₹3,600 GST. |
👉 This shows how the same income is taxed multiple times in different ways.
Key Points From Raghav Chadha’s Speech
- He said there is tax on almost everything in daily life.
- Health insurance and life insurance also attract GST. Instead of encouraging families to buy cover, this makes them costlier.
- Inflation also brings higher GST collections. When prices rise, GST is charged on the inflated price.
- Common citizens pay tolls, while MPs and ministers are exempt.
- According to reports, toll on highways costs people about ₹2 per km.
His words reflected the growing pressure on the middle class.
Examples of Multiple Taxation in Daily Life
Buying a House
- Stamp duty
- Registration fee
- GST (on under-construction property)
- Property tax every year
Education
- GST on coaching classes
- GST on books (in some cases, though many are exempt)
- Fees often include various surcharges
Travel
- GST on airline tickets
- Airport development fee
- Toll on roads leading to airports
This list shows how wide-spread multiple taxation is.
Why Citizens Feel Stressed
- Double burden: You pay income tax first, then GST, then tolls.
- Reduced savings: More taxes mean less disposable income.
- Unfair exemptions: Lawmakers are exempt from tolls, but common people are not.
- Impact on inflation: Higher prices increase tax collection further.
How to Manage Your Tax Burden
You cannot avoid paying mandatory taxes like GST or tolls. But you can plan your income tax better. India’s Income Tax Act provides deductions that help you save.
Here are some useful sections to know:
Section 80C – Popular Tax Saving Investments
You can claim up to ₹1.5 lakh deduction. Options include:
- Public Provident Fund (PPF)
- Equity Linked Savings Scheme (ELSS)
- Life Insurance Premiums
- 5-year Bank Fixed Deposit
Read our Complete Guide to Section 80C to understand each option.
Section 80D – Health Insurance Premiums
You can claim deductions for health insurance:
- Up to ₹25,000 for self, spouse, and children
- Extra ₹25,000 for parents (₹50,000 if senior citizens)
This reduces the cost of health cover. Learn more in our Section 80D guide.
Section 80CCD(1) and 80CCD(1B) – NPS for Retirement
NPS is a government-backed retirement savings option.
- Deduction up to 10% of salary (or ₹1.5 lakh) under 80CCD(1).
- Additional ₹50,000 under 80CCD(1B).
See our full article on NPS Tax Benefits for Employees.
Old Regime vs New Regime
Your choice of tax regime also matters. The old regime offers deductions like 80C and 80D. The new regime has lower rates but fewer deductions.
Check our detailed article: Old Tax Regime vs New Tax Regime.
The Larger Question
Raghav Chadha’s speech has sparked debate. Should the government reduce multiple taxes? Should health and life insurance be made tax-free? Should tolls be removed once roads are recovered?
These questions affect millions of Indians.
What You Should Do
- Track your expenses and see how many indirect taxes you pay.
- Use available deductions to lower your income tax.
- Compare old and new tax regimes before filing returns.
- Watch debates like this YouTube Video on Multiple Taxation to stay informed.
Final Thoughts
Multiple taxation adds stress to citizens already struggling with high costs. Income is taxed at the source, then again on spending, then again on usage. While you cannot control GST or tolls, you can control your income tax planning. Use deductions under Section 80C, 80D, and NPS. Choose the right regime.
Awareness is the first step to saving money. The more you know, the better you manage your tax burden.
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