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The super-rich – those with a taxable income of over ₹1 crore — have reason to be glum. Not only has the surcharge of 10 per cent, which was meant to be a temporary measure, been retained but an additional surcharge of 2 per cent has also been imposed.
With the surcharge now 12 per cent, the rich will have to shell out more. An individual with taxable income of, say, ₹1.5 crore will now pay ₹49.6 lakh as against ₹48.7 lakh earlier — that’s ₹88,580 more.
But there’s a silver lining in the tax calculation, which continues from the earlier budgets. The total tax including surcharge cannot be higher than the total amount payable as income tax on an income of ₹1 crore by more than the amount of income that exceeds ₹1 crore. To explain, on an income of ₹1 crore, the tax comes to ₹28.84 lakh. But if an individual’s taxable amount is ₹1 crore and ten thousand, the total tax will not increase by ₹3.46 lakh (12 per cent of ₹28.84 lakh) but by only about ₹10,000.
Another saving grace for the rich is that wealth tax, which was not yielding the government much revenue, has now been abolished.
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