5% security surcharge on income above Rs 60,000
Union Finance Minister Yashwant Sinha on Thursday proposed keeping the income tax slabs unchanged, but sought to introduce a five per cent national security surcharge on income above Rs 60,000, adding a burden on the majority of the taxpayers.
The government at the same time withdrew the two per cent surcharge imposed after the Gujarat earthquake.
Sinha said national security was an overriding concern and its cost has to be shared by all of us.
Keeping this in mind, a surcharge of five per cent across-the-board on all categories of tax payers, except individuals and Hindu Undivided Families (HUFs), having total income up to Rs 60,000, is being imposed, he said.
In his budget recommendations for the fiscal 2002-2003, the finance minister announced that the present income tax slabs of ten per cent on income between Rs 50,000 and Rs 60,000, 20 per cent on income between Rs 60,000 and Rs 150,000 and 30 per cent on income above Rs 150,000 would remain unchanged.
Sinha also announced that income tax rebate on investments under Section 88 for those earning more than Rs 150,000 would be ten per cent instead of the existing 20 per cent.
Taxpayers in the higher tax brackets do not require fiscal incentives to save through the various designated instruments, Sinha said.
The finance minister felt that there was no need to change the prevailing personal income tax rates.
Also, the finance minister did not disturb the Rs 5000 benefit on net payable taxes for women under Section 88c of the Income Tax Act, keeping their tax exemption limit up to Rs 80,000.
He also proposed that no rebate would be allowed where taxable income exceeds Rs 500,000. The special rebate of 30 per cent for persons having taxable salary income up to Rs 100,000 will continue.
The finance minister extended the exemption available to certain categories of employees receiving amounts up to Rs 500,000 as VRS compensation to employees of certain institutions of national or state-level importance.
He proposed to allow the relief under Section 89 on additional burden imposed in any one year due to receipt of arrears of salary, in cases where family pension is received in arrears.
In continuation with the taxpayer-friendly measures brought through in his earlier budgets, he proposed to abolish the provisions of the Act, which require a clearance to be obtained from the appropriate authority before registering a transfer of an immovable property.
UNI
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