Government Proposes To Enhance Surcharge On Super Rich, No Changes In Income Tax Structure

Government Proposes To Enhance Surcharge On Super Rich, No Changes In Income Tax Structure

Government Proposes To Enhance Surcharge On Super Rich, No Changes In Income Tax Structure 

New Delhi: Nirmala Sitharaman, the Union Finance Minister announced no changes in the income tax structure in the first Budget of Prime Minister Narendra Modi's second term. Ms Sitharaman left the income tax slabs and rates intact, however proposed to enhance the surcharge on the super rich. The government enhanced the surcharge on individuals having taxable income above Rs. 2 crore and up to Rs. 5 crore, and taxable income above Rs. 5 crore, to increase their effective tax rates by around 3 per cent and 7 per cent respectively.

Here's 10 points: 

1. "I aim to simplify tax administration and bring greater transparency," she said.

2. While maintaining the existing income tax slabs and rates applicable to the small taxpayers, the government made some changes in taxes applicable to corporates and the super rich.

3. "My tax proposals will aim to stimulate growth, incentivize affordable housing and encourage start-ups by releasing the entrepreneurial spirit," the finance minister said.

4. Corporate tax: The government proposed to widen the lower corporate tax rate of 25 per cent to companies having annual turnover up to Rs. 400 crore, from Rs. 250 crore at present.

5. "This will cover 99.3 per cent of the companies. Now only 0.7 per cent of companies will remain outside this rate."

Also Read: PM Modi Says, "Budget Will Fulfill Expectations Of 21st Century India"

6. Surcharge: The surcharge applicable to those in the income categories of Rs. 2 crore-5 crore and above Rs. 5 crore will have to bear an increase by around 3 per cent and 7 per cent respectively in effective tax rates.

7. "In view of the rising income levels, those in the highest income bracket need to contribute more to the nation's development."

8. Excise duty and cess: In view of easing crude oil prices in the international markets, the government proposed to increase the special additional excise duty, and road and infrastructure cess each by one rupee a litre on petrol and diesel. It is also proposed to increase custom duty on gold and other precious metals from 10 per cent to 12.5 per cent.

9. Start-ups: The issue of establishing identity of the investor and the source of funds will be resolved by putting in place "a mechanism of e-verification", Ms Sitharaman said. With this, funds raised by start-ups will not require any kind of scrutiny from the Income Tax Department.

10. In a bid to make electric vehicles affordable to consumers, the government will provide an additional income tax deduction of Rs. 1.5 lakh on the interest paid on loans taken to purchase electric vehicles.

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