HomePersonal Finance NewsBudget 2019: Govt hikes income tax surcharge for HNIs earnings above Rs 2 crore

Budget 2019: Govt hikes income tax surcharge for HNIs earnings above Rs 2 crore

Following the hike in surcharge, the surcharge for high net-worth individuals (HNIs) earning between Rs 2 crore to Rs 5 crore was increased to 25 percent from 15 percent. The effective tax rate now stands at 39 percent.

Profile image

By CNBC-TV18 July 5, 2019, 2:12:28 PM IST (Published)

Budget 2019: Govt hikes income tax surcharge for HNIs earnings above Rs 2 crore
Finance minister Nirmala Sitharaman has hiked a surcharge on income tax paid by individuals with an income of above Rs 2 crore.


Following the hike in surcharge, the surcharge for high net-worth individuals (HNIs) earning between Rs 2 crore to Rs 5 crore was increased to 25 percent from 15 percent. The effective tax rate now stands at 39 percent.

For HNIs earning above Rs 5 crore, the surcharge has been hiked to 37 percent from 15 percent. The effective tax rate now stands at 42.74 percent.

“The raising of the personal income tax rate would be negative. There are about 1.5 lakh taxpayers in India who are earning more than Rs 1 crore. So the amount of earning more than Rs 3 crore would diminish quite sharply after that. It is a tax against a very small minority," said Ramesh Damani, Member of BSE.

He added, "The other thing that surprised me was the public shareholding to make it 65 percent, which will be very negative for the multinational companies (MNCs) which like to have a higher level of shareholding and promoter led companies, so the market will be a bit dubious about that proposal.”
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!