Insurance Blog

Where does your Tax money go?

Many of the people don’t know the use of paying taxes. The people don’t know how or where are these collected tax money goes? Also they wonder as to why they should pay tax when they do not get any direct benefits. Do they get or do they not?

Many of us have a gist as to what happens when we don’t pay tax and thus many try to exploit the loop-holes present in the tax payment system. Now the next question is who are the people refraining from paying necessary tax? Is it the common man or a business man or the corporate! What are the odds of these people paying the exact tax amount for their actual earning?

Do these people realize the consequence? Maybe, Maybe Not! Do you know of the consequence? To sum up the consequence we can say that the government may go into debt for spending more than what they receive. They may think why should they care if the government goes into debt? It’s not their concern is what many think. But on a long run they will be forced to make it their concern. How so?

Well for that we need to understand why and how the tax money is been spent?

The expenditures made by the government are:


a.     Revenue expenditure

b.     Capital expenditure


a.     Revenue expenditure

b.     Capital expenditure

What does the expenditure cover? It mostly covers the need for Social Services like Education, Health, Broadcasting etc., Economic Services like, Agriculture, Industry, Power, Transport, Communications, Science & Technology, etc. , pension, police, defence services, loans to state and union government, etc.

Some of the expenditure in the year 2015 on

A.    NON-plan expenditure are:

1.   Interest Payments and Prepayment Premium – Rs. 4,42,620 crores

2.     Defence Services – Rs. 1,43,236 crores

3.     Subsidies –Rs. 2,57,801 crores, Etc.

B.     Plan expenditure

1.      Central Plan – Rs. 1,33,245 crores

2.     State Plans – Rs. 1,96,051 crores

3.     Union Territory Plans- Rs. 5,708 crores, Etc.

For detailed Expenditure of the government Click here.

To know the expenditure in a gist Click here.

The revenue receipts shows how much the government got for that financial year from the tax. It differs from the budget plan outlaid. To know more on Revenue receipt Click here.

These are expenditures for the development of our nation and thus we develop along with the nation.

From these documents what we can see is that the government spends more than what it receives. Pretty obvious huh! So to reduce the debt, the government is trying it’s hardest to bring out the unaccounted money and is making plans and rules to fill in the loop-holes of tax payment system. So let’s help the government and ourselves by paying the exact tax amount for our true income.