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Today’s Top Headlines

India Considering New Wealth Taxes

by Mary Swire,, Hong Kong

28 January 2013

The Indian government "should consider the argument that the very rich should be asked to pay a little more on some occasions," Finance Minister P. Chidambaram has said.

The comments were made in a recent television interview. While Chidambaram expressed his desire to see stable tax rates, he did add that: "There is an argument...that when the economy requires, the government requires more resources, the very rich should pay a little more."

Chidambaram was nonetheless eager to make it clear this was not a view he personally was expressing. Rather it was "simply an argument that I have heard and am repeating." At present, India's highest personal income tax rate stands at 30% on all earnings over INR1m (USD18,630) a year. A 10% surcharge on top of this rate was dropped in 2009.

Chidambaram is due to present his 2013 Budget toward the end of next month. The government has already made tweaks to the tax system ahead of the Budget, including hiking the duty on gold imports, in a bid to bring down a ballooning current account deficit. It is also said to be mulling the introduction of an inheritance tax and the re-implementation of the income tax surcharge.

However, plans for the implementation of a controversial new general anti-avoidance rule (GAAR) have been pushed back once again, to 2016, and the government remains embroiled in an ongoing row with telecoms company Vodafone over a 2007 tax bill.

TAGS: individuals | inheritance tax | Finance | tax | investment | India | ministry of finance | tax authority | tax rates | import duty | tax reform | telecoms | individual income tax

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