New Delhi, February 28: Finance Minister P Chidambaram failed to attract the middle-class while burdening the Super Rich.
In his eight speech as Finance Minister, P Chidambaram on Thursday offered a few sops to income tax payers but slapped a 10 per cent surcharge on Super Rich individuals and corporates. He also levied an inheritance tax and raised duties on mobile phones, cigarettes and luxury vehicles.
In his tax proposals in the Budget for 2013-14 to raise an additional Rs 18,000 crore, he gave a benefit of Rs 2,000 to individual tax payers with taxable income of up to Rs 5 lakh but made no change in either slabs or rates of personal income tax which will continue at 10, 20 and 30 per cent.
Defence allocation has been increased to Rs 2,03,672 crore, including Rs 86,741 crore for capital expenditure.
First-time home buyers will get an additional deduction of interest of Rs 1 lakh for home loans above Rs 25 lakh and Rs 1.50 lakh for home loans up to Rs 25 lakh. This will be over and above the current Rs 1 lakh deduction allowed for self-occupation.
Implementing the much-talked about super-rich tax, Chidambaram proposed to levy a 10 per cent surcharge on income of Rs 1 crore and above and a 5 to 10 per cent surcharge on domestic corporates whose income exceeds Rs 10 crore a year.
Presenting his eighth budget, the first after coming back to finance ministry last year, Chidambaram imposed an inheritance tax of 1 per cent on transfer of immovable property of over Rs 50 lakh. He also continued the Education Cess for all tax payers at three per cent.
While the direct tax proposals will bring in Rs 13,300 crore, those on indirect tax side will rake in Rs 4,700 crore.
The Excise Duty has been increased by 18 per cent on cigarettes, cigars, cheroots and cigarillos.
High-end luxury motor vehicles, motorcycles and yacht will attract 100 per cent import duty, up from 75 per cent while SUVs will attract a higher excise duty at 30 per cent, up by 3 per cent.
Passengers will be allowed to bring in duty free gold jewellery of up to Rs 50,000 in case of men and Rs 1,00,000 in case of women. There is no change in the peak rate of basic customs duty on non-agriculture products and rates of excise duty and service tax of 12 per cent.