The Indian Government’s annual budget was presented in the parliament by the Finance Minister Mrs Nirmala Sitharaman on the 1st of February 2026. After several years the taxes on Tobacco products were increased significantly. It is clear that the government does not want you to have a happy life, because even if you want to smoke a cigarette for five bucks, the government of India ( acting like a big nanny) wants to deter you from smoking by applying 40% GST on your cigarette. There is also an additional excise duty on it based on the length of the cigarette. Effectively for a pack of cigarettes costing Rs. 120/-, the cigarette cost is only Rs. 35 whereas the taxes on the pack amount to Rs. 85/-. Yes you read this right. 65-70 percent of the cost of a pack of cigarettes is made up of the tax component.
The same logic applies to Alcoholic beverages, Gold & Jewellery, Cars, Homes, Stocks and whatever else you can think of. The way I see it , the government of India seems to be of the opinion that if you are leading a basic life, eating dal, roti and sabji by living in a basic accommodation and travelling by public transport then Ms Sitharaman and her big brother Mr Modi don’t have any objections. But if you have a little money and want to enjoy your life by having the occasional smoke or drink or if you earn enough money to buy a gold necklace for your wife or mom then the government will promptly forward their palms first asking for a big chunk of your income or expenses. The government of India’s logic seems very simple: if you have money to enjoy your life we will make sure you can’t enjoy it without giving us our hafta.
Although alcoholic beverages are taxed by the respective State Governments, the various taxes on alcoholic beverages add up to 40-80 percent of the retail price of the alcohol and vary from one state to another. Also there is no input tax credit for the raw materials used in making alcoholic beverages as the final product is exempt from GST.
Although gold & gold jewellery fall in the 3 percent tax slab of GST, there is a 5 percent GST applicable on the making charges of jewellery and don’t forget the capital gains tax of 12.5 percent if you profit from the sale of your hard earned jewellery by selling it after three years or more. There is a tax exemption limit of 1.25 lakhs on the capital gains received by selling gold ( Long Term Capital Gains) there by again highlighting the fact that if you have little, the government won’t bother you but if you have more than the government wants a piece of the pie ( and that too a large piece). The same applies to long term capital gains earned from the sale of stocks and equity mutual funds. If you want to buy a small car, GST is 18 percent but if you have money to buy a luxury car, feed the government first ( 40 percent GST). So the message from the government of India is very clear: live a modest life or be prepared to share your booty.
The government of India is effectively engaging in double taxation by taxing our income as well as our expenses. If you earn more, they want 40 percent of your income (including cess and other charges). If you spend more, they want 40 percent GST on luxury products and services which you want to buy. Effectively speaking they want to make your life miserable, only then they will keep quiet. And if you manage to save some money and invest a decent amount in gold then first you have to disclose your PAN. If you deposit 50,000/- cash in your bank account at one go, you must first tell it to the government by disclosing your PAN. If you have too much liquid cash lying in your savings account, your bank will report to the government about it. And if you trade or invest in stocks they have the high securities transaction tax and high capital gains tax to cut you short.
I wonder why it’s not possible to live in a country where there is no double taxation. Where the highest income tax payable is limited to 25 percent of your net income ( all inclusive). Where the government either taxes your income or your expenses, not both. Where it’s not a crime if you are successful and make good money. And where you don’t have to hide your income worrying that the government will steal from it.
Mungekar Wealth 