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Why Are Some Indians Leaving India Because of Taxes? A Closer Look
More and more Indians are thinking about moving abroad and one of the big reasons is the tax system in India. In this article, we explain clearly how high taxes, complex rules, and poor returns on taxes are pushing some people to look at life outside India.
1. High Tax Rates for High Earners
India’s top income tax rate can go up to 39%, and after adding surcharges and cess, it can reach nearly 43%. Many high earners and business owners feel they’re paying a big chunk of their income without seeing enough benefits back in return.
2. Tax vs. Quality of Life
Some feel that the taxes they pay don’t translate into good services - like roads, public transport, water supply, and reliable infrastructure . When private solutions fill gaps, they still pay taxes on top of that.
3. Complex Tax System and Red Tape
India’s tax system is often described as over-complicated, with many layers and confusing compliance rule. This leads to increased paperwork, delays, and stress for both individuals and businesses.
4. Tax Planning Through Residency
High-net-worth individuals sometimes try to avoid Indian tax rules by shifting their residence to countries with lower or no income tax, like UAE and Singapore. These moves are often part of their larger tax planning strategy.
5. The Brain Drain Factor
Many skilled professionals feel pushed to leave because of the combined impact of high taxes, poor infrastructure, and bureaucracy. A startup founder captured this sentiment:
“Leave India where they will even tax your popcorn”
6. Community Debate: Is It Just Taxes?
- Some argue that India’s high taxes limit freedom and wealth growth .
- Others believe people should stay and improve systems from within, though that can feel frustrating when basic services are lacking.
Where Are They Going?
Many are setting up residency in nations like the UAE, Singapore, or Mauritius - places with low or zero personal income tax, better living standards, and easier ways to do business.