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

Economic Pulse

REUTERS SHOWCASE

Deregulation Impact

Deregulation Impact

Private fuel retailers to dip toe, not dive back, into India  Full Article 

Gold Import

Gold Import

RBI will not change gold import rules - sources  Full Article 

Idea Results

Idea Results

Idea Cellular Q2 profit up 69 percent  Full Article 

An RBI First

An RBI First

RBI releases minutes of financial stability council's Aug meet  Full Article 

Global Shares

Global Shares

Japanese stocks lead shares worldwide, IBM weighs on Dow  Full Article 

IBM Chip Unit

IBM Chip Unit

IBM to pay Globalfoundries to take chip unit  Full Article 

IBM Earnings

IBM Earnings

IBM ditches 2015 operating EPS target, shares slump 7 pct  Full Article 

Reuters India Mobile

Reuters India Mobile

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