FinMin mulls surcharge on 'super rich' in Budget
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Currently, as per the finance ministry data, of the 3.24 crore taxpayers, over four lakh earn above Rs 20 lakh and contribute more than 60 per cent to the total tax collection. On the other hand, those earning below Rs 5 lakh comprise 89 per cent of the taxpayers and contribute only 10 per cent to total tax collection. On Wednesday, Wipro chairman Azim Premji had said the suggestion for taxing the super-rich was a "politically" correct thing to do, although he had expressed doubts if the government would actually implement it.
Sanjay Sanghvi, tax partner at Khaitan and Co, said that the idea of taxing the "super rich" stems from the fact that the government is faced with a huge fiscal deficit and is looking at new sources of revenue. "Government is thinking of addressing fiscal deficit and the thought process is that it may not matter to those who are in high income bracket, if they pay a little more tax." He added that the move is not likely to have any negative ramifications in form of enhanced tax evasion.
The fiscal position of the economy has been deteriorating with the government revising the fiscal deficit target for the current year to 5.3 per cent of GDP as against 5.1 per cent of GDP targeted in the Budget 2012-13.