<p>Finance Minister P. Chidambaram Thursday proposed a tax cut of Rs.2,000 for people earning an annual income of between Rs.200,000 and Rs.500,000 and said anything beyond that was not possible given the current circumstances.<br /><br /></p>.<p>Presenting the national budget for 2013-14, the finance minister said any hike in the exemption limit for direct tax that is paid by individuals would take millions out of the tax net and was neither a desirable proposition, nor feasible.<br /><br />Accordingly, he proposed a Rs.2,000 tax credit for those in the first slab.<br />"This measure will benefit 1.8 crore (18 million) tax payers," he said, adding that this would entail an outgo of Rs.3,600 crore ($650 million) to the exchequer.<br /><br />Chidambaram said the tax-GDP ratio in the country had slipped to 5.5 percent for direct taxes and 4.4 percent for indirect taxes. "Our tax-GDP ratio is one of the lowest in the world. We should reclaim 11.9 percent tax-GDP ratio in the short term."<br /><br />For the affluent, the finance minister took the cue from what was proposed as the "super rich tax" by Wipro chairman Azim Premji, and said a surcharge of 10 percent was proposed on the those earning more than Rs.1 crore per annum.<br /><br />"This surcharge will be for one year," the finance minister said, adding there were some 42,800 people who fell in that bracket. "I am sure, there is a little bit of Azim Premji in everyone and this additional burden will be for one year."</p>
<p>Finance Minister P. Chidambaram Thursday proposed a tax cut of Rs.2,000 for people earning an annual income of between Rs.200,000 and Rs.500,000 and said anything beyond that was not possible given the current circumstances.<br /><br /></p>.<p>Presenting the national budget for 2013-14, the finance minister said any hike in the exemption limit for direct tax that is paid by individuals would take millions out of the tax net and was neither a desirable proposition, nor feasible.<br /><br />Accordingly, he proposed a Rs.2,000 tax credit for those in the first slab.<br />"This measure will benefit 1.8 crore (18 million) tax payers," he said, adding that this would entail an outgo of Rs.3,600 crore ($650 million) to the exchequer.<br /><br />Chidambaram said the tax-GDP ratio in the country had slipped to 5.5 percent for direct taxes and 4.4 percent for indirect taxes. "Our tax-GDP ratio is one of the lowest in the world. We should reclaim 11.9 percent tax-GDP ratio in the short term."<br /><br />For the affluent, the finance minister took the cue from what was proposed as the "super rich tax" by Wipro chairman Azim Premji, and said a surcharge of 10 percent was proposed on the those earning more than Rs.1 crore per annum.<br /><br />"This surcharge will be for one year," the finance minister said, adding there were some 42,800 people who fell in that bracket. "I am sure, there is a little bit of Azim Premji in everyone and this additional burden will be for one year."</p>