FinMin mulls surcharge on 'super rich' in Budget


As the argument in favour of a tax on the rich gains currency, the finance ministry is reportedly looking at the possibility of a higher tax on the 'super rich', with the possibility of a surcharge on those with an annual income of over Rs 1 crore among the options on the table.

An official source said that the proposal is likely to form a part of the Budget 2013-14 and the ministry is analysing the feasibility of the option. Currently, the taxpayers earning above Rs 10 lakh per annum have to pay tax at the rate of 30 per cent, the highest rate in the three-tier tax slab. The taxpayers have to pay an education cess of 3 per cent on the tax paid. Currently, income is taxed at three rates — 10 per cent, 20 per cent and 30 per cent — fixed in 1997. If the proposal is introduced, those earning above Rs 1 crore will have to pay tax along with education cess and the surcharge levied. A surcharge is essentially a tax on a tax.

On Thursday, in an interview to a TV channel, finance minister P Chidambaram, who spoke about a stable tax regime during his meetings with foreign investors, maintained that the argument for taxing the "very rich" "a little more" should be considered. "I believe in stable tax rates."

"However, I must concede that there is an argument, underline the word argument, that when the economy requires, when the government requires more resources the very rich should willingly pay a little more. That is not to say that tax rate should not be stable. I think we should have stability in tax rates but we should consider the argument whether the very rich should be asked to pay a little more on some occasions," he was quoted in the interview.

... contd.

Please read our terms of use before posting comments
TERMS OF USE: The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).
comments powered by Disqus