Robot Tax and The Indian Perspective

  • Authors

    • Mr. Rupak Das Assistant Professor, ICFAI Law School, IFHE, Hyderabad
    • Dr. Ritwika Mazumdar Faculty Associate, ICFAI Law School, IFHE, Hyderabad
    • Dr. Bhawna Tyagi Faculty Associate, ICFAI Law School, IFHE, Hyderabad
    https://doi.org/10.14419/4990pq11

    Received date: July 23, 2025

    Accepted date: September 6, 2025

    Published date: October 5, 2025

  • Robot Tax; Labour Taxation; Capital Taxation; Economic Justice; Progressive Taxation

  • Abstract

    The rapid convergence of Robotics and Artificial Intelligence (AI) is transforming industries, triggering fears of job loss, income inequality, ‎and a decline in tax revenues. In response, the world’s policymakers have proposed a 'robot tax', a tax on automation, aimed at offsetting the ‎fiscal impact of declining employment-based tax revenues. Though such apprehensions are legitimate, the article argues that such taxation is ‎a misdirected policy intervention that may curtail innovation, retard productivity, and generate economic inefficiencies. A better approach, ‎however, is to address inherent structural imbalances in the tax system, especially in India, where fiscal policies are grounded in the country's constitutional ethos. India's tax system, both direct and indirect taxation, disproportionately affects labour income while subjecting capi‎tal income to very little taxation.‎

    Excessive reliance on indirect taxation increases economic inequality, which disproportionately impacts low-income groups. Meanwhile, ‎corporate tax incentives and relatively lower capital gains taxes help wealth accumulation. Considering the constitutional mandate for social ‎welfare, reforming the tax system to fairly distribute the fiscal burden between labor and capital is crucial. Instead of implementing a robot ‎tax, the article recommends raising capital gains taxes and pursuing progressive tax reforms. Furthermore, complementary policies such as ‎labor market reforms, reskilling programs, and improved social security are essential to support displaced workers and promote technological innovation. A balanced tax policy that accounts for the relationship between labor and capital income in India, consistent with the coun‎try's constitutional principles of equity and justice, can enable a smooth shift to an AI-driven economy while fostering economic inclusion‎.

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  • How to Cite

    Das, M. R. . ., Mazumdar, D. R. . ., & Tyagi , D. B. . (2025). Robot Tax and The Indian Perspective. International Journal of Accounting and Economics Studies, 12(6), 176-185. https://doi.org/10.14419/4990pq11