Budget 2013: Notional relief for taxpayers but rich to pay more

Thu Feb 28, 2013 7:00pm IST

Finance Minister Palaniappan Chidambaram (C) arrives at the parliament to present the 2013/14 budget in New Delhi February 28, 2013. REUTERS/Adnan Abidi

Finance Minister Palaniappan Chidambaram (C) arrives at the parliament to present the 2013/14 budget in New Delhi February 28, 2013.

Credit: Reuters/Adnan Abidi

REUTERS - Finance Minister P. Chidambaram gave a notional tax break to millions of taxpayers on Thursday with a proposed tax credit of 2,000 rupees in the annual budget to people with income up to 500,000 rupees, but introduced a surcharge on the rich.

The Harvard-educated politician said there was little room to give away tax revenues or the tax base in a budget aimed at reviving growth in India.

"1.8 crore (18 million) tax payers are expected to benefit to the value of 3,600 crore (36 billion) rupees," Chidambaram said in his speech in parliament.

"Assuming an inflation rate of 10 percent and a notional rise in the threshold exemption from 200,000 rupees to 220,000 rupees, I propose to provide a tax credit of 2,000 rupees to every person who has a total income up to 5 lakh rupees," he said.

The finance minister also introduced new taxes on the rich with a surcharge of 10 percent for one year on those with taxable incomes of more than 1 crore (10 million) rupees.

Chidambaram said 42,800 persons in the country had admitted to taxable incomes exceeding 10 million rupees per year.

But there was little relief for the man on the street and Chidambaram said there was no case to revise either the income tax brackets or the rates since the current slabs were introduced last year.

"Even a moderate increase in the level of threshold exemption will mean that hundreds of thousands of tax payers will go out of the tax net and the tax base will be severely eroded."

The finance minister also said that people buying houses would get an additional deduction of 100,000 rupees on interest payments on their first home loan of up to 2.5 million rupees.

(Read the story, click here here)

(Also read: SUV duty hike proposed, click here here)

(Reporting by India Online)

FILED UNDER:

Religion and Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

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