VTA’s suggestion to tax more to super rich has been heard, as the surcharge proposed to be levied on those having taxable income of more than Rs.2 crore to Rs.5 crore will be at the rate of 25% instead of 15% currently, which a hike by 10 per cent. Similarly, those having taxable income of more than Rs.5 crore, the surcharge proposed to be levied at 37 per cent, which is again a hike of 22 per cent, from 15 per cent currently.
The maximum tax rates for such individuals would considerably increase from 35.88% to 39% for income earners between Rs.2-5 crore and to 42.744% for income earners above Rs.5 crores. With additional deduction of Rs.1.5 lakh on interest paid on loans for purchase of house up to 45 lakhs; the affordable housing sector will get a remarkable boost.
Highly appreciable is additional income tax deduction of Rs.1.5 lakh on the interest paid on the loans taken to purchase electric vehicles; this will encourage taxpayers to buy Electric cars thus gradually bringing much required cleaner air in cities. Although we were expecting some relief in direct tax slabs but they remain unchanged; however good for middle income group as no tax if your income doesn’t exceeds more than Rs.5 lakh. And Central Government continues its efforts to discourage usage of cash.