Budget takeaways: Super rich tax to continue, no changes in direct tax

While Finance Minister P Chidambaram has exempted rice from the service tax ambit,  no announcement was made on import duty on gold, which was hiked to a record 10 percent last year. There were expectations that the 80:20 scheme may be relaxed, but nothing on that front was announced during the vote on account speech by the finance minister. As per the 80:20 scheme, 20 percent of all imports must leave the country as exports might. UPA chairman Sonia Gandhi had written to the central government in January to ask for a cut in the record import duty on gold and for other restrictions to be eased. Also the 10 percent additional surcharge on income tax for those earning above Rs 1 crore – the “super-rich” tax – has been extended from FY14 to FY15. This was announced as a one-year charge in last year’s budget but now it is not. [caption id=“attachment_1384367” align=“alignleft” width=“380”]  Super rich tax to continue. Andrew Middleton/Flickr[/caption] Moreover, no changes were made to direct taxes. So personal income tax remains as follows: i) Rs. 2 lakh to Rs. 5 lakh: 10 percent (A tax rebate of Rs. 2,000 from tax calculated will be available for people having an annual income upto Rs. 5 lakh) ii) Rs. 5 lakh to Rs. 10 lakh: 20 percent iii) Above Rs. 10 lakh: 30 per cent Surcharge for high earners: Individuals who earn more than Rs 1 crore per year have to pay a 10 percent surcharge on their income. Corporate tax rate for domestic companies remains unchanged at 33.99 percent. Minimum alternate tax (MAT) rate stands at 20.96 percent. Corporate tax rate for foreign companies stands at 43.26 percent.