Government will review surcharge in super rich in 2022: FM
New Delhi, August 23 () Discarding any immediate review of an improved surcharge for the super-rich, Finance Minister Nirmala Sitharaman said Friday that the matter will be analyzed only in 2022, when the country will celebrate the 75th anniversary of the independence.
In the 2019-20 Budget, the government increased the surcharge from 15% to 25% on the taxable income between Rs 2 crore and Rs 5 crore, and from 15% to 37% for income above Rs 5 crore .
Following the increase in the surcharge, the effective income tax rate for people with taxable income of Rs 2-5 rupees has increased to 39 percent from 35.88 percent and for people over Rs 5 Rs million at 42.7 percent.
I would like to say clearly that in commemorating the 75th anniversary of the independence of India and immediately upon reaching that stage, we want to review the surcharge on HNIs (individuals with high net worth), he said when asked if the government is considering eliminating Super rich surcharge too.
The government decided on Friday to withdraw the improved surcharge on short and long-term capital gains that arise from the sale of shares and futures and options to encourage investment in the capital market.
The withdrawal would lead to the loss of revenue of Rs 1.4 billion rupees for the treasure, the Secretary of Revenue, Ajay Bhushan Pandey, told reporters.
Regarding the specific reference to the individual with high net worth, at the time we finish the 75th anniversary of the independence of India, we will review and receive a call, he added.
Commenting on the decision, EY India's tax partner, Sameer Gupta, said that while this is a highly anticipated announcement, the scope of total coverage remains to be seen. It is not clear what the implication is, for example, in other capital gain items such as gains in debt securities and derivatives, he added. Fortunately, the surcharge on earnings from these instruments and income elements should also be addressed, he said. DP RAM