Moreover, the minister also introduced a surcharge of 7 percent on companies having an income between Rs 1 crore and Rs 10 crore.

The new measures will lead to tax collection of Rs 9,000 crore whereas the wealth tax could earn only Rs 1,008 crore, he said.

"With this 2 percent additional surcharge a collection of Rs 9,000 crore is targeted against a tax sacrifice of Rs 1,008 crore (on account of abolition of Wealth Tax)," Jaitley said while presenting the Budget for 2015-16.      

The surcharge would now be 12 percent for individuals earning Rs 1 crore and above and companies with income of Rs 10 crore and above.

“The rich and wealthy must pay higher taxes," Jaitley said.

There was no point in continuing the Wealth Tax as the cost of collection was high, he said, adding this will lead to tax simplification and widening of the tax base.

The surcharge would be applicable on individuals, Hindu Undivided Families, firms, cooperative societies and local authorities having income exceeding Rs 1 crore.

A surcharge of 10 percent on taxable income of Rs 1 crore and above was imposed in 2013-14 by the then Finance Minister P Chidambaram.

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