Surcharge on super-rich raised to up to 7% over tax in Budget 2019

Super rich income tax budget - The Federal
The Union Budget proposes to raise the surcharge on taxes for the super rich. Photo - iStock

The Union budget has proposed raising taxes on the super-rich by increasing the surcharge on tax on those earning more than ₹2 crore.

Presenting her maiden budget, Finance Minister Nirmala Sitharaman said the surcharge on income tax for those earning between ₹2 crore and ₹5 crore has been raised to 3 per cent and for those earning more than ₹5 crore, it has been raised to 7 per cent.

There was no change in tax rates for those earning below ₹2 crore. Income tax was waived for those earning up to ₹5 lakh in February by the then-acting Finance Minister Piyush Goyal.

Also read: Budget highlights infra projects bridging urban-rural divide

As per the Central Board of Direct Taxes (CBDT) data, the total number of taxpayers, including corporates, firms and HUFs, having more than ₹1 crore income stood at 1,40,139 for the assessment year 2017-18.

Of this, the individual number of individual taxpayers having income above ₹1 crore was 81,344 in the same period.

In another move that could hurt the super-rich, Sitharaman said, “I propose to levy a TDS of 2 per cent on cash withdrawal exceeding Rs 1 crore in a year from a bank account.”

This, she said, was to encourage digital transactions in the country, as per the Digital India initiative.

Also read: Sitharaman says govt will invest widely in agri infrastructure

The Budget proposes to make return filing compulsory for persons, who have deposited more than ₹1 crore in a current account in a year, or who have expended more than ₹2 lakh on foreign travel or more than ₹1 lakh on electricity consumption in a year or who fulfils the prescribed conditions, in order to ensure that persons who enter into high value transactions also furnish return of income.