The arguments both in favour and against increasing direct tax for this category have come in.
The Finance Minister proposed an increase in the surcharge on the direct tax paid by High Net-worth Individuals (HNIs) having income of Rs 2 crore to Rs 5 crore to 3 percent. An additional 7 percent is to be paid if the income exceeds Rs 5 crore.
Surcharge is an additional tax, and is used to make the rich pay up more and contribute a greater share of taxes. Previously, the surcharge stood at 15 percent for income exceeding Rs 1 crore, which will now become 18 percent for incomes of Rs 2 crore to Rs 5 crore. It will be a whopping 22 percent on income exceeding Rs 5 crore. There is an additional 4 percent cess on all income slabs, which will significantly increase the effective tax paid by these HNIs. For example, an income of Rs 3 crore will attract tax of 30 percent, plus surcharge of 18 percent and a cess of 4 percent.
Arguments both in favour of and against increasing direct tax for this category have come in. Some experts feel it was more important to increase the revenues from indirect tax, GST, first as the Economic Survey released on Thursday showed a shortfall of 16 percent from the target of Rs 7.43 lakh crore. Since 2015-16, direct tax to GDP ratio has risen much faster than the indirect tax to GDP ratio. In fact, indirect tax/GDP has been virtually stagnant, and with GST collections falling short of expectations, may continue to do so.On the other hand, some feel that taxing the rich isn't just important but is also necessary.
The FM has also proposed inter changeability of PAN and Aadhaar. "Those who don't have PAN, can file ITR by simply quoting Aadhaar number," Nirmala Sitharaman noted.The Great Diwali Discount!
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First Published on Jul 5, 2019 03:26 pm