Finance minister Pranab Mukherjee has proposed a lower surcharge limit on corporate tax of 5 per cent against the existing 7.5 per cent even as he retained the corporate tax for domestic firms earning total annual income of over Rs1 crore at 30 per cent.
Presenting the Budget 2011-12, Mukherjee proposed a hike in the Minimum Alternate Tax (MAT) to 18.5 per cent from the existing 18 per cent of book profits.
He also widened the ambit of the minimum alternate tax to include developers in Special Economic Zones (SEZs).
He said the aim is to phase out the surcharge on tax over a period of time so that it does not affect overall mobilisation.
The government had reduced surcharge on corporate tax while hiking the rate of MAT in the previous budget as well.
"My initiative of phasing out the surcharge continues. I propose to reduce the current surcharge of 7.5 per cent on domestic companies to 5 per cent," Mukherjee said while presenting the Budget for 2011-12.