Paragraph A of Part III to the First Schedule – Proposed Surcharge @ 10% for income exceeding Rs 50 lakhs – Removal of surcharge to ensure parity in effective tax rates vis-à-vis small and medium companies
Surcharge @ 10% is proposed in cases where total income of an individual/HUF/AOP/BOI exceeds Rs.50 lakhs but do not exceed Rs. 1 crore. Surcharge of 15% would continue to be applicable where the total income of an individual/HUF/AOP/BOI exceeds Rs 1 crore.
The levy of such surcharge would result in inequity in the effective rate of tax (i.e., more than 30%) for individual/HUF/AOP/BOI assessees with total income exceeding Rs.50 lakhs vis-cl-vis the rate of 25% proposed for small and medium companies. The inequity would arise not only vis-cl-vis salaried assessees but individuals/HUFs engaged in small businesses would also have to bear the brunt of surcharge which may go against the present Government’s aim of promoting ease of doing business.
It is suggested that the proposed [email protected]% for total income between Rs.50 lakhs to Rs. 1 crore be withdrawn to ensure equity in effective rate of tax vis-a-vis the proposed rate for small and medium companies.