India imposes 10% levy on its billionaires

Featured India - March 1st, 2013
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India’s billionaires will have to pay more tax after the Congress-led government directed a 10% surcharge on the incomes of the country’s super-rich.

The additional levy was met with widespread support in the country where economic growth has carved the already widening income gap.

Finance minister Palaniappan Chidambaram called on member of India’s upper echelons to “cheerfully” follow in the footsteps of Azim Premji, the billionaire founder of IT giant Wipro.

Premji, India’s third richest person, announced last week that he was donating a 12% stake in Wipro – worth $2.2 billion – to his own charitable foundation.

“I believe there is a little bit of the spirit of business tycoon Azim Premji, chairman of Wipro and Azim Premji Foundation, in every affluent tax payer,” Chidambaram said.

But not all those that will be hit by the new tax levy are as rich, according to Financial Times. The surcharge will be applied to those with declared taxable incomes of more than Rs10m ($180,000), including high-level salaried professionals.

“There are about 42,800 people in India who admit to having a taxable income of over Rs100 crore a year,” Chidambaram said in his budget speech.

India’s super-rich, known for owning a number of expensive vehicles and boats, will have to pay more for their luxuries as import duties on cars will rise from 75% to 100%, tariffs on high-end motorcycles will be increased to 75% from 60%, while duties on yachts will rise to 25% from 10%, Financial Times reports.

India has 61 billionaires, with a combined net worth of $250 billion.