Budget 2013: UPA's boldest direct tax drive targets the rich
Turning to the “relatively well placed in the society” to raise resources in a difficult year, Chidambaram proposed surcharge on individuals and companies above certain income levels, introduced a transaction tax in non-farm commodities (CTT) and proposed anti-tax evasion steps. The CTT paid, however, will be allowed as a deduction on income from commodity trade. He also raised the tax on payment of royalty or fee for technical services to non-residents from 10% to 25%.
While he kept personal and corporate income tax rates steady, surcharge has been increased across the board to mop up extra revenue. Individuals with taxable income above R1 crore will have to pay 10% surcharge, making 42,800 people to pay more taxes in 2013-14. “The maximum effective tax rate for such an individual would be 34%,” said Homi Mistry, partner, Deloitte. Firms and local authorities with similar income too have to pay the same rate of surcharge.
In 2013-14, a 10% surcharge to be deducted at source
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