'Pay direct tax 30%, indirect tax 18%, ATM tax...': Startup founder questions India's tax logic

Wisdom Hatch founder Akshat Shrivastava isn't mincing words. Highlighting India's mounting taxes—30% on direct income, another 18% indirect, and now an increased ATM charge of Rs 19 per transaction—he sharply critiques a financial system where even withdrawing your own money comes at a rising cost. For Shrivastava, banks skimming 1-1.5% off foreign exchange transfers only adds insult to injury, pushing him to label India's economic logic as increasingly "senseless."

Shrivastava’s criticism comes in response to fresh developments in India's ATM transaction charges. The Reserve Bank of India (RBI) recently approved an increase in the ATM interchange fee, raising charges from Rs 17 to Rs 19 effective from May 1, 2025.

The move, cleared by the National Payments Corporation of India (NPCI), applies to both domestic financial and non-financial transactions.

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NPCI's circular dated March 13 clarifies that even non-financial ATM interactions—such as balance inquiries—now cost Rs 7, excluding GST. A separate GST further inflates these fees. "NPCI had requested RBI approval to implement this change. In this regard, RBI, vide letter dated March 11, 2025, has advised NPCI that the ATM interchange fees can be decided by the ATM network," the circular notes.

However, certain transactions remain exempt from the revised fees. Micro-ATMs, interoperable cash deposits (both card and UPI-based), and international ATM transactions will continue under existing rates. Interestingly, balance enquiry charges in Nepal and Bhutan are similarly pegged at Rs 7 excluding GST.

NPCI data indicates steady ATM infrastructure, with the NFS network maintaining 2.65 lakh ATMs nationwide year-on-year. Yet transaction volumes have dropped significantly—down to 315 million transactions in February 2025, a 13.7% decline compared to 365 million transactions in February 2024.

Amidst these rising charges, the economic backlash is palpable. Shrivastava’s pointed criticism—echoed across social platforms—captures widespread consumer frustration over mounting financial burdens.