India's high earners bemoan tax surcharge

MUMBAI/NEW DELHI Thu Feb 28, 2013 9:56pm IST

Indian security personnel stand guard near sacks containing the 2013/14 federal budget papers at the parliament in New Delhi February 28, 2013. REUTERS/Adnan Abidi

Indian security personnel stand guard near sacks containing the 2013/14 federal budget papers at the parliament in New Delhi February 28, 2013.

Credit: Reuters/Adnan Abidi

Stocks

   

MUMBAI/NEW DELHI (Reuters) - High-earning Indians gave a collective groan on Thursday when the government imposed a 10 percent surcharge on their income, following a global trend which it expects to be popular in an election year.

Just 42,800 of India's 1.2 billion people will be affected by the extra take on pay above 10 million rupees, according to the finance minister.

The measure will be in place for one year.

"There are substantial number of people with good income who are not paying taxes and the focus should have been more on bringing them under the tax net," said Sunil Duggal, CEO of consumer goods maker Dabur India (DABU.NS).

"He should have ensured compliance so that more people who have avoided taxes are brought into the net of taxes," said Issac George, director of GVK Power & Infrastructure Ltd (GVKP.NS).

Dozens of corporate executives, watching a telecast at an industry event in New Delhi, exchanged nervous smiles as Finance Minister P. Chidambaram introduced the surcharge in his budget speech.

Chidambaram, seeking extra cash to fund a dash for growth, said he expected those affected to pay up "cheerfully."

The ruling Congress faces elections by May 2014 and the tax move is likely to play well with its largely rural and poor core supporter base.

India had 125,500 dollar millionaires in 2011, according to a Capgemini and RBC Wealth Management world wealth report released last year.

(Additional reporting by Aditi Shah; Editing by David Cowell)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

WTO DEAL

REUTERS SHOWCASE

Car Launch Ahead

Car Launch Ahead

Tata Motors bets on new sedan to revive weak India sales.  Full Article 

Gold Smuggling

Gold Smuggling

In cat-and-mouse game, India uncovers new gold smuggling route.  Full Article 

Boosting Output

Boosting Output

India group ICVL to nearly triple coal output from mine bought from Rio Tinto.  Full Article 

Maruti Results

Maruti Results

Maruti Suzuki says profits helped by sentiment, not growth.  Full Article 

China PMI

China PMI

China July official PMI rises to 51.7 from 51 in June.  Full Article 

Tracking the Monsoon

Tracking the Monsoon

Monsoon turns patchy after revival.  Read 

ICICI Profit Up

ICICI Profit Up

ICICI Bank Q1 net profit up 17 percent, beats estimates.  Full Article 

Coal India

Coal India

Some Coal India mines may be run by foreign firms - minister  Full Article 

Fuel Prices

Fuel Prices

IOC to cut petrol prices by 1.5 pct from Friday  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage