The proposal to levy a ‘super-rich’ tax, at the rate of 35 per cent, on those earning more than Rs 10 crore (Rs 100 million) a year might not receive support of the Union Cabinet, which is to consider the Direct Taxes Code (DTC) Bill this month.This is because the government might not like to sully the business environment in the country in the run-up to the general elections.
The finance ministry is moving a supplementary note to propose changes in the DTC Bill sent to the Cabinet in August. Though it is unlikely to propose any change to the ‘super-rich’ tax provision, officials say the Cabinet might not clear it in view of the polls.
The Cabinet had not taken up the Bill at its previous meeting, reportedly due to apprehensions at the Prime Minister’s Office (PMO) over the new tax slab. PMO, it is learnt, also worried the time might not be right to bring a new legislation without extensive consultation.
In Budget 2013-14, Finance Minister P Chidambaram had imposed a surcharge of 10 per cent on those earning at least Rs 1 crore (Rs 10 million) in a year. He had said this was a one-time tax on the wealthy to help the economy tide over a difficult fiscal situation. At present, 42,800 Indians earn more than Rs 1 crore a year; those earning over Rs 10