The super rich may have to pay more as the government strives to raise revenues to meet its commitment to rating agencies and markets to bring down fiscal deficit.
The government is proposing a 35% tax rate for those earning more than Rs 10 crore in the Direct Taxes Code (DTC) that is likely to be tabled in Parliament during the ongoing session. The Union Cabinet will consider the code on Thursday. The direct taxes bill, once approved by Parliament, will replace the current Income-Tax Act, which dates back to 1961.
At present, taxable income in excess of Rs 10 lakh is taxed at 30% while those earning more than Rs 1 crore have to pay a surcharge of 10%. Further, since top earners receive substantial income by way of dividends, the Direct Taxes Code incorporates a 10% tax on dividend income in excess of 1 crore.
In the current dispensation, dividend income is tax-free in the hands of the investor as the company distributing dividends pays a dividend distribution tax at the rate of 15%.
Source:-The Economic Times
The government is proposing a 35% tax rate for those earning more than Rs 10 crore in the Direct Taxes Code (DTC) that is likely to be tabled in Parliament during the ongoing session. The Union Cabinet will consider the code on Thursday. The direct taxes bill, once approved by Parliament, will replace the current Income-Tax Act, which dates back to 1961.
At present, taxable income in excess of Rs 10 lakh is taxed at 30% while those earning more than Rs 1 crore have to pay a surcharge of 10%. Further, since top earners receive substantial income by way of dividends, the Direct Taxes Code incorporates a 10% tax on dividend income in excess of 1 crore.
In the current dispensation, dividend income is tax-free in the hands of the investor as the company distributing dividends pays a dividend distribution tax at the rate of 15%.
Source:-The Economic Times
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