Finance Minister Arun Jaitley on Saturday proposed to abolish the wealth tax paid by the super-rich of the nation, recommending in its place the payment of an additional surcharge on income tax instead.
"The total wealth tax collection in our country was Rs 1,008 crore in 2013-14. Should a tax, which leads to high cost of collection, and low yield be continued or should it be replaced? The rich and wealthy must pay more tax than the less affluent ones. I have therefore decided to abolish wealth tax and replace it with an additional 2 percent surcharge on the super-rich, with a taxable income of over Rs one crore. This will lead to tax simplification, and enable the department to focus on ensuring compliance and widening of the tax base," Jaitley said in his 2015-16 budget speech in Parliament.
"As against a tax sacrifice of Rs 1,008 crores, through this measure the department would be collecting an additional Rs 9,000 crores on the two percent additional surcharge. Further, to tax wealth held by individuals and entities, information regarding assets, with is currently required to be furnished in the wealth tax returns will be captured in the income tax returns. This will ensure the abolition of wealth tax does not escape the tax net," he added.