Budget 2025: Strong possibility of rationalizing surcharge on salaried employees
Discussions are in full swing regarding the upcoming Budget 2025, and this time the salaried class has special expectations. Experts and economists believe that the government should seriously consider rationalizing the surcharge imposed on salaried individuals in this budget. The current tax system requires individuals with high incomes to pay a surcharge in addition which increases the tax burden.
Currently, income above Rs 50 lakh is subject to surcharge,pay a surcharge at varying rates depending on the income level. This surcharge is imposed in addition to income tax, which significantly increases the tax burden on high income earners.
Economic experts criticize the existing surcharge structure, but it also discourages skilled professionals from the higher income group. He says that by rationalizing surcharge, the government can not only simplify the tax system but also boost the economy.
Mr Arun Sharma, a senior tax consultant, says, “Rationalizing the surcharge should be an important aspect of this budget. This will not only provide relief to the salaried class, but will also boost consumption in the economy.”
The salaried class have demanded for a long time a reduction in the surcharge rates or its complete removal. They argue that they already pay a significant amount as income tax, and the additional burden of surcharge affects their financial planning.
“Vide Finance Act 2023, a proviso introduced under section 44ADA(1) [i.e., presumptive taxation for individual or partnership firm (other than LLP) engaged in profession, pursuant to which the eligibility limit for opting presumptive taxation raising for gross receipts from profession from Rs 50 lakh to Rs 75 lakh in those cases where the aggregate amount received in cash does not exceed 5% of total gross receipts,” Assocham says.