Wealth tax to be abolished with tax on 'super rich'

In a bid to remove "high-cost, low-yield taxation", Finance Minister Arun Jaitley Saturday proposed to abolish wealth tax and impose a 2 percent additional surcharge on the "super rich" to garner more funds.

"As against a tax sacrifice of Rs.1,008 crore through these measures, the department would be collecting about Rs.9,000 crore from the 2 per cent additional surcharge," the finance minister said, announcing this particular tax proposal.

As a result, individuals and related taxpayers with an income of Rs.1 crore and above will have to pay a total surcharge of 12 percent. In the case of companies, the slab has been fixed at 7 percent for income between Rs.1 crore and Rs.10 crore and 12 percent above that.

For foreign companies, surcharge will continue at 2 percent on incomes between Rs.1 crore and Rs.10 crore and 5 percent above that.

Earlier, the surcharge was 10 percent on individuals with an income of Rs.1 crore and above, while on companies, it was 5 percent up to Rs.10 crore and 10 percent above that.

"Further, to track the wealth held by individuals and entities, the information regarding the assets which are currently required to be furnished in wealth tax return will be captured in the income tax returns," the finance minister said.

"This will ensure that the abolition of wealth tax does not lead to escape of any income from the tax net."