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Last updated: 10 Jan, 2013  

Rangarajan.9.Thmb.jpg Raise taxes for India's super-rich: Rangarajan

Rangarajan.9.jpg
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SME Times News Bureau | 10 Jan, 2013

Advocating for higher rates of taxes for super rich, Prime Minister’s economic advisor C. Rangarajan on Saturday said that the forthcoming budget could look at imposing surcharge on income above a threshold. 

"The idea is that people above a certain income level should be taxed. There are two ways of raising the tax rates for the super-rich. The highest tax slab is 30 percent. We can add an additional higher slab, or we can keep the slab the same but impose a surcharge for income above a particular level," he said.

Rangarajan said the logic behind the idea is that the tax-GDP ratio should go up as there was need for greater money flow into the economy.

His suggestion comes ahead of the Budget for 2013-14 for which Finance Minister P. Chidambaram has started consultations with different interest groups.

However, he replied in the negative when asked whether a formal proposal has been placed before the union finance ministry on taxing the super rich. "This is only an idea," Rangarajan said.

India taxes income at three rates - 10 per cent, 20 per cent and 30 per cent. These rates were fixed in 1997 by the then Finance Minister Mr. Chidambaram.

Recently Finance Minister P Chidambaram had called for a debate on the need of inheritance tax in India, wondering if the country had paid enough attention to accumulation of wealth in the hands of a few.

Earlier this week, the U.S. Congress voted for raising taxes on rich Americans, as part of resolutions of crisis over the so-called 'fiscal cliff'. The U.S. legislation raises taxes on individuals earning more than $400,000 per year, and on couples earning more than $450,000.

Rangarajan, a former RBI governor, also stressed for fiscal discipline to promote growth.

 
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DILIP SRIVASTAVA | Mon Jan 14 15:39:17 2013
Increase one slab higher than 30% for higher income group as well companies but the basic exemption limit for Individuals should be raised to 5L.


Raise Taxes for India'a Super-rich:
Sivakumar | Mon Jan 14 10:48:24 2013
Good idea to consider for amend.


Increase compliance
AN INDIAN | Thu Jan 10 06:55:43 2013
I understand that PC and Mr. Rangarajan are well learned people. But there is a small thing to know that why Tax the already paying Tax. Why not increase the compliance from the current Tax system. Why not increase the indirect Tax collection. If you leave more money in the hand the individual will spend more and they the Govt should collect the Taxes from there. Why Govt is not plugging wholes in Corruption in expenditure where if somethings are to be done in one rupee tax payers 3 rupee is spend. Why there is rampant corruption in events like CWG. How come people on High authority and high level of politics gets richer over night. How come Jagan Mohan reddy is charged onbly after he takes a seprarate path from rulling party? Please increase the compliance and reduce the corruption. Govt will automatically have more money in hand. There is limit of taxing common people.


 
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