In this episode, Monika investigates a pressing concern: the scale of income tax evasion within India’s middle class. She walks listeners through her extensive research to determine how many eligible taxpayers remain outside the tax net and how much revenue is lost. Using credible reports and official tax data, she arrives at a staggering number—8.3 crore people not paying taxes, leading to a revenue shortfall of ₹7.8 lakh crore. Monika urges policymakers to address this gap rather than burdening existing taxpayers with additional levies.

Monika then breaks down the concept of fiscal deficit, explaining how it arises when government expenditures exceed revenue. She clarifies how borrowing works, the distinction between borrowing for consumption versus capital creation, and why India’s push for infrastructure investment is a positive sign. With fiscal deficit currently at 4.8% of GDP, she highlights the government's target of reducing it to 3% and why this number will be crucial in the upcoming budget.

Listener queries bring up diverse financial concerns. Sujit Kumar asks for insights into Portfolio Management Schemes (PMS) and how they compare to mutual funds. Ajay Kumar worries about mid-cap holdings within his small-cap mutual fund and seeks guidance on rebalancing. Finally, Rohit Sasikumar wants to optimize tax harvesting while switching from an underperforming fund to a Nifty 50 index fund.

Chapters:

(00:34 - 05:09) The missing taxpayer: how much tax is not collected?

(05:10 - 06:34) Understanding fiscal deficit and why it matters

(06:35 - 09:26) Should you invest in a portfolio management scheme?

(09:29 - 12:04) Why does your small cap fund have mid caps?

(12:05 - 13:12) How to harvest tax-free long-term equity gains

https://price360.in/Executive_Summary_Middle_Class.pdf

https://incometaxindia.gov.in/Documents/Direct%20Tax%20Data/Income-tax-statistics-i-t-return-AY_2021-22.pdf

If you have financial questions that you’d like answers for, please email us at ⁠[email protected]⁠

Monika’s book on basic money management

⁠⁠⁠https://www.monikahalan.com/lets-talk-money-english/⁠⁠⁠

Monika’s book on mutual funds

⁠⁠https://www.monikahalan.com/lets-talk-mutual-funds/⁠⁠

Monika’s workbook on recording your financial life

⁠⁠⁠https://www.monikahalan.com/lets-talk-legacy/⁠⁠⁠

Calculators

⁠⁠⁠https://investor.sebi.gov.in/calculators/index.html⁠⁠⁠

You can find Monika on her social media @monikahalan. 

Twitter ⁠⁠⁠@MonikaHalan⁠⁠⁠

Instagram ⁠⁠⁠@MonikaHalan⁠⁠⁠

Facebook ⁠⁠⁠@MonikaHalan⁠⁠⁠

LinkedIn ⁠⁠@MonikaHalan⁠⁠

Production House: ⁠⁠www.inoutcreatives.com⁠⁠

Production Assistant:⁠⁠ Anshika Gogoi⁠⁠