Budget -Income Tax Surcharge Rate hiked for higher Income Assessees

The Finance Bill 2013-14 proposes a surcharge of 10 per cent on persons whose taxable income exceed Rs. 1 crore per year. This will apply to individuals, HUFs, firms and entities with similar tax status. Presenting the Union Budget in the Lok Sabha, the Finance Minister Shri P.Chidambaram said that he also proposes to increase the surcharge from 5 per cent to 10 per cent on domestic companies whose taxable income exceeds Rs.10 crore per year. In the case of foreign companies, the surcharge will increase from 2 per cent to 5 per cent.

In all other cases, such as dividend distribution tax or tax on distributed income, the current surcharge of 5 per cent is being increased to 10 per cent. The additional surcharges will be imposed for only one year, i.e., financial year 2013-14. The education cess for all taxpayers shall continue at 3 per cent. The Finance Minister said that he expects the relatively prosperous to bear a small burden for one year.