Super Tax On The Banking Industry.

The government has raised taxes on the already over-taxed banking industry in the budget for 2022-23 starting July 1.

During the last financial year, the banks were being taxed at the rate of 35% plus 4% super tax i.e. a total tax of 39%. In the current finance bill, the government is going to tax the banks at the rate of 49%. What the government has actually done is that they have considered 39% (35% tax rate + 4% super) as the base tax rate and have then applied 10% super tax, thus making it 49%.

Whereas, the government should have considered 35% as the base tax rate of last year and then should have applied the super tax of 10% to make it 45% and not 49%. Since banks were already paying 4% super tax, an additional 6% tax should have been further imposed to take it to 45%.

Already heavily taxed, the banking industry is naturally not happy. They have approached the government as they fear that such measures are bound to affect their earnings and, in the long run, will be detrimental to the overall economy of the country.

It is to be seen whether the government would change its position and provide relief to the banks or not. It can be assumed that the government has levied these and retrospective imposition of taxes on the banking industry with a view that this...