Budget 2025: Important to rationalize surcharge on salaried individuals

Budget 2025 income tax expectations: Finance Minister Nirmala Sitharaman will present the Union Budget 2025 on February 1, 2025. In its pre-Budget 2025 memorandum, Assocham has called for rationalization of surcharge on salaried individuals.

As per the existing provisions the applicable surcharge rates on salaried individuals are as follows:



In order to bring parity between the classification of small assessee(s) being professionals vis-à-vis salaried individuals, Assocham says that FM Nirmala Sitharaman in her Budget should consider increasing the threshold for surcharge by 50% as below.

In order to protect the interest of the revenue, the maximum slab may continue to be kept at Rs 5 crore.

“Vide Finance Act 2023, a proviso was inserted 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 was increased 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.

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This implies that, in order to ease compliance, the tax department is treating professionals having receipts of Rs 75 lakh or less (in case of non-cash receipts) as small taxpayers. In order to promote the digital economy, the department increased the threshold of presumptive taxation by 50% (i.e. from Rs 50 lakh to Rs 75 lakh).

However, from a surcharge levy perspective, the threshold begins from Rs 50 lakh, it says.