Introduction
On September 11, 2025, a provocative post by finance influencer Akshat Shrivastava sparked a nationwide debate: “Is India’s financial system designed to keep the average citizen poor?” Social media lit up, news channels weighed in, and thousands of professionals, entrepreneurs, and salary-earners began fiercely discussing how taxes, transaction costs, commissions, and regulatory hurdles impact personal wealth creation in the country. This viral conversation matters because it forces the Indian public to confront hard realities about money and systemic leakages in wealth management, prompting a flood of reactions and actionable advice from experts, tax planners, and investors.
A Breakdown of the Viral Claims
The central argument of the viral post is clear-cut: Indians lose money at every step, from earning to spending to investing.
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Income Tax: Salaried individuals pay up to 30% tax on salary and professional income.
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GST: Consumption of goods and services attracts GST rates ranging from 5% to 28%, with many essential items taxed at 18%.
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Commissions and Charges: Investments in mutual funds carry annual commissions between 1-2.25%; insurance premiums often include hidden charges; stock market transactions involve Securities Transaction Tax (STT), brokerage, and regulatory fees.
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Double Taxation: Interest, dividends, and capital gains from investments are taxed again, reducing effective returns.
This “cycle of leakage” is visualized as a funnel: earnings at the top, outflows at each step, cumulative erosion of potential savings at the bottom.
How the Indian Financial System Actually Works
India’s financial system is one of the most regulated in the world. Its layered approach to taxes and charges exists for specific reasons:
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Progressive Taxation ensures higher earners contribute more to national revenue.
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GST replaces multiple older taxes, aiming for transparency and accountability, though it’s a consumption-based tax hitting every segment.
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SEBI and RBI Regulations control the flow of funds, mandate disclosures, and cap charges—but consumers rarely know the full details.
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Commissions/Fees on mutual funds, insurance, and stock market transactions are designed to pay for expertise, management, and risk coverage.
While the system is built for stability, oversight, and welfare funding, it does result in significant monetary outflows for ordinary citizens, stoking the perception that “the game is rigged against wealth creation.”
Is It Really Designed to “Keep You Poor”? The Nuanced Truth
Financial experts and industry veterans point out that systemic leakage isn’t unique to India—it’s a global phenomenon in regulated economies. Countries like the US and UK also apply progressive tax, transaction fees, and capital gains tax. What differs is awareness, complexity, and the choices citizens make:
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Most Indians don’t claim full legitimate tax deductions (Section 80C, 80D, 10(10D), etc.).
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Wrong mutual fund selection and high-expense insurance policies erode returns—savvy users opt for direct mutual funds (0.4–0.6% expense ratio) and term-only insurance.
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Real estate and gold, popular “safe” investments, attract stamp duty, GST, TDS (on rent), and capital gains on sale.
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Financial literacy is low; only a fraction of investors explore global investment avenues or optimize for tax residency.
Thus, the “design” is not a conspiracy but a combination of regulatory safety nets, government funding needs, and gaps in user information and empowerment.
The Debate: Viral Reactions and Counterpoints
Netizens quickly split into two camps:
Camp 1 – The Critics:
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“My Rs 100 salary loses Rs 30 to income tax, Rs 18 to GST, and another Rs 3-5 to investment charges. How is anyone supposed to get rich?”
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“Savings schemes have low returns and high paperwork. Only the rich benefit from loopholes.”
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“Small investors are penalized—charges should be abolished or capped.”
Camp 2 – The Reformists:
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“Taxation funds roads, defense, health, and education—without it, society falls apart.”
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“Direct plan mutual funds, smart SIPs, and proper insurance can minimize leaks.”
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“Focus on optimizing documentation, leverage fintech, and global platforms to maximize what you keep.”
Financial planners urge behavior change: “The system rewards the knowledgeable and proactive. Learn, plan, diversify—don’t just complain.”
Real Solutions: How Smart Indians Minimize Financial ‘Leakage’
1. Tax Optimization and Legal Deductions
Indian law offers a host of deductions under Section 80C (PF, ELSS, life insurance, home loan repayment), Section 80D (health insurance), and more. Use all eligible avenues to reduce taxable income.
2. Direct Mutual Funds and Low-Cost Indexing
Instead of regular mutual funds (which pay commissions to agents/distributors and can have 1.5%-2.25% expense ratios), direct plans and index funds charge as low as 0.4-0.6%, compounding into significant savings over years.
3. Insurance Optimization
Opt for pure term insurance (just risk coverage), avoid investment-linked policies, and check online comparison tools for the lowest premium and charges.
4. FinTech and Cross-Border Investing
Platforms like Zerodha, Groww, and Kuvera facilitate direct index investments; new regulatory changes now allow easier overseas investing and NRIs to optimize tax residency and leverage low-tax jurisdictions in alignment with Indian rules.
5. Dividend and Capital Gains Planning
By timing withdrawals, harvesting losses, and making use of tax-free instruments (PPF, tax-free bonds), invest wisely to reduce double and triple taxation.
6. Global Asset Allocation
SEBI and RBI now allow retail investors to access foreign stocks, ETFs, and global bonds up to permissible limits; diversifying some assets out of India can reduce local taxation and provide currency hedges.
7. Regular Financial Literacy and Review
Stay aware of new regulations, low-cost investment tools, insurance changes, and SEBI updates. Revisit investment plans every year to react to new rules and loopholes.
What SEBI, RBI, and the Government Are Doing
In recent years, regulatory bodies have taken steps to reduce unfair leakage and support wealth creation:
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SEBI has capped MF exit load at 3% (down from 5%) and encouraged direct plans.
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RBI updates UPI and digital payment rules every year to minimize charges and transaction frictions.
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New rules for transparency require full disclosure of fees, commissions, and charges—empowering consumers to choose the lowest-cost products.
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GST changes now protect basic goods and some vital services—insurance premiums on health and life remain tax exempt after recent GST 2.0 reforms.
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Foreign investment channels and simplified tax procedures offer new routes to building wealth, including revised rules for FPIs, NRIs, and angel investing.
Conclusion: From Complaints to Conscious Control
The viral debate forces a reckoning with the real leaks in India’s financial system. But beneath the headlines, personal finance experts insist “the system rewards awareness,” not just compliance. Legal strategies, smarter investing, optimized insurance, and a yearly review are the true antidotes to systematic erosion.
The system is not so much “designed to keep you poor” as it is “designed to require vigilance.” With financial reform moving fast, those who learn, adapt, and act can keep—and grow—more of their money. The future will favor those who make the shift from passive complaint to active financial mastery.