Tax hike on ‘very rich’ is worth a look, says FM
Official sources here told FE that a surcharge on income tax may be imposed in the Budget 2013-14 for people above a certain income threshold to be called “very rich”. Alternatively, the tax on dividend income may be hiked to the level other incomes are taxed, in cases where the amount is above a certain defined limit, impacting mainly promoters and other significant (large) shareholders, who clearly fall under the “very rich” category. A hike in the maximum marginal income tax rate — 30% at present — is a less favoured option, as this is the rate proposed in the Direct Taxes Code and a hike might not be in sync with the finance minister’s promise of a stable tax regime.
“I think we should have stability in tax rates but we should consider the argument that very rich should be asked to pay a little more on some occasions, but that is not the view I am expressing. That is simply the argument I have heard and I am repeating,” Chidambaram said. The minister added: “I believe in stable tax rates. However, I must concede that
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