Surcharge on big companies hiked to 10%

Finance Minister P Chidambaram today raised surcharge to 10% on companies with annual taxable income of over Rs 10 crore.

The Finance Minister in the Budget for 2013-14 also proposed increasing surcharge to 5%, from 2% at present, on foreign companies whose taxable income is above Rs 10 crore.

Besides, on dividend distribution tax the surcharge has been raised to 10% from 5%.

"I propose to increase the surcharge from 5% to 10% on domestic companies whose taxable income exceeds Rs 10 crore per year," Chidambaram said.

Soon after the presentation of the Budget, shares of domestic companies tanked on the BSE with the benchmark index Sensex nosediving 291 points.

In his Budget proposals, Chidambaram also proposed a 10% surcharge on individuals and entities with income above Rs 1 crore. The proposal will cover 42,800 individuals and entities.

These additional surcharges would be in force for only one year. However, education cess would continue at 3%.

At the same time, the Finance Minister has provided tax relief of Rs 2,000 for the Tax Payers in the first bracket of Rs 2 lakh to Rs 5 lakh.

The tax proposals on the direct taxes side are estimated to yield Rs 13,300 crore.