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

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Literary Giant Dies

Literary Giant Dies

Nobel winner Garcia Marquez, master of magical realism, dies at 87.  Read 

Election 2014

Election 2014

India holds biggest day of voting with BJP gaining strength  Full Article | Full Coverage 

Insider Trading

Insider Trading

Ex-Goldman director Gupta starts prison term on June 17.  Full Article 

Market Eye

Market Eye

Sensex jumps 351 points, snaps 3-day losing streak  Full Article 

Expansion Plans

Expansion Plans

Reliance Industries, HPCL Mittal plan refinery expansions.  Full Article 

S&P on India

S&P on India

S&P: India's ratings to depend on next govt econ, fiscal policies.  Full Article 

Ambitious Aim

Ambitious Aim

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Deal Talk

Deal Talk

Piramal to buy 20 percent stake in Shriram Capital for $334 million.  Full Article 

Bond Market

Bond Market

A star abroad, RBI boss riles bond traders at home  Full Article 

Reuters India Mobile

Reuters India Mobile

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