FM offers minor sops to income tax payers
Story Dated: Thursday, February 28, 2013 14:13 hrs IST
New Delhi: Walking the tight rope ahead of next year's elections, Finance Minister P Chidambaram today offered minor sops to income tax payers but slapped a 10 per cent surcharge on 'super-rich' individuals and corporates, levied an inheritance tax and raised duties on mobile phones, cigarettes and luxury vehicles.
In his tax proposals in the Budget for 2013-14 to raise an additional Rs 18,000 crore, he gave a benefit of Rs 2,000 to individual tax payers with taxable income of up to Rs 5 lakh but made no change in either slabs or rates of personal income tax which will continue at 10, 20 and 30 per cent.
Aiming at higher growth rate for inclusive and sustainable development and revive manufacturing, Chidambaram hiked outlays for health, water and sanitation, SCs/STs and tribals and rural development.
Defence allocation has been increased to Rs 2,03,672 crore, including Rs 86,741 crore for capital expenditure.
First-time home buyers will get an additional deduction of interest of Rs 1 lakh for home loans above Rs 25 lakh and Rs 1.50 lakh for home loans up to Rs 25 lakh. This will be over and above the current Rs 1 lakh deduction allowed for self-occupation.
Implementing the much-talked about super-rich tax, Chidambaram proposed to levy a 10 per cent surcharge on income of Rs 1 crore and above and a 5 to 10 per cent surcharge on domestic corporates whose income exceeds Rs 10 crore a year.
In the case of foreign companies, who pay a higher rate of corporate tax, the surcharge will go up from 2 to 5 per cent. On dividend distribution tax, he proposed to raise current surcharge from 5 to 10 per cent.
Presenting his eighth budget, the first after coming back to Finance Ministry last year, Chidambaram imposed an inheritance tax of 1 per cent on transfer of immovable property of over Rs 50 lakh.
Continuing the education cess for all tax payers at 3 per cent, he promised that the new surcharges will be in force for just a year during 2013-14.