By Admin 
Union Budget 2026: According to tax experts, the government should avoid increasing income tax surcharge on ultra-rich people and reintroducing wealth tax in the upcoming Budget 2026-27. Experts believe that such a step can motivate people from high income group to settle in low tax countries.
How much is the income tax surcharge?
At present, income tax surcharge is applicable on individuals with income above Rs 50 lakh. A surcharge of 10 percent is imposed on income between Rs 50 lakh and Rs 1 crore, 15 percent on income between Rs 1 crore and Rs 2 crore and 25 percent on income between Rs 2 crore and Rs 5 crore. People earning more than Rs 5 crore and opting for the new income tax system pay a surcharge of 25 per cent.
Whereas people coming under the old tax system pay surcharge at the rate of 37 percent. According to estimates of independent economists, there is a possibility of a loss of about Rs 2 lakh crore to the exchequer in the current financial year due to cut in GST rate and low income tax collection. Any additional source of revenue in FY 2026-27 could help the government allocate more to defense and other sectors.
expert opinion
Amit Rana, partner of PwC & Company LLP, said that the principle of vertical equity is followed in imposing income tax. Which means that the more one earns, the higher should be his tax liability.
When you start making the tax too high, you risk losing those high income earners, he told PTI. Who would not like to live in India, and in today’s world it is possible.
He further said that taxes on high income individuals should be carefully balanced as they are the ones who create industry and employment. Surbhi Marwah, tax partner, EY India, also stressed that if the surcharge is higher or wealth tax is re-introduced, there could be a risk of high net worth individuals (HNIs) leaving the country to lower tax countries.
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