Finance Finisters May Not Change the Tax Slabs but May Increment the Surcharge for Income above Particular Level In 2013

As per the Economic Times of India the proposal for taxing the super-rich does not find much favour with Chidambaram, who is known to prefer moderate taxes. However, given the low tax base in India, Chidambaram may look to expand the tax reach and look at measures to ensure higher compliance.

Economists including PMEAC chairman C Rangarajan, the Finance Minister P Chidambaram is unlikely to contrivance with tax slabs despite of fundamental playing field for a higher tax rate for the ‘super-rich’ in this year’s budget.

Government taxes income at three rates – 10 per cent, 20 per cent and 30 per cent. Incidentally, it was Chidambaram who brought down the tax slab from 40 per cent to 30 per cent in 1997.

Pitching for higher rates of taxes for super rich, Rangarajan had said that the forthcoming budget could look at imposing surcharge on income above a threshold.

“… one need not disturb the structure of income tax system as it is now. But add a surcharge for income above particular level. I believe as we go along, we need to raise more revenues and the people with larger incomes must be willing to contribute more,” he had said.

Last week, Chidambaram met representatives from the agriculture sector, kicking off discussions his ministry holds with stakeholders before the annual budget that is usually presented on the last day of February. Around 20 experts from different farm groups and institutes participated in the pre-budget meeting.

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