India’s taxes nipping at your earnings? It could be worse.

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Subscribe to enjoy similar stories. India’s seemingly high income tax rates are softer than that of several advanced economies, allowing for a better quality of life across income groups, data show. Indian taxpayers, particularly those in the highest 30% tax bracket, have been crying hoarse that the country’s tax rates are among the highest in the world.

However, that may not be true if one were to compare tax rates as per income slabs adjusted for purchase price parity, or PPP. Austria and Finland levythe world’s highestmarginal income tax rate at 55%. In India, the highest marginal rate for taxpayers in the highest income slab is 39% under the new tax regime and 42.7% in the old regime.

These rates include surcharge and 4% education and health cess and are applicable on incomes above ₹5 crore. Surcharges only kick in post an annual income of ₹50 lakh. Between ₹10 lakh and ₹50 lakh, the top marginal rate charged is 31.2% (including cess).

A better way to compare tax rates on personal incomes between two countries is by adjusting earnings for purchase price parity, which compares the cost of goods between countries and equalizes purchasing power by accounting for differences in price levels. For instance, a $100,000 income in the US is equal to about ₹86.42 lakh in India under current exchange rates. When adjusted for PPP, the $100,000 equivalent in India is ₹20.2 lakh.

While the marginal tax rate for a ₹86 lakh annual income in India is 33.1%, it is 31% for a ₹20.2 lakh income. Also, in the US, one would need a salary of $2.4 million to afford a similar quality of life as someone earning an annual income of ₹5 crore in India, which attracts highest tax rate of 39%. Also, in the US, one would need a salary of $2.4