MUMBAI: The so-called ‘suit-boot ki sarkar’ is taking the tax route for an image makeover. Mukesh Ambani as well as his chauffeur will have to pay more tax. The big and the famous, along with millions of well-heeled individuals and the vast middle-class India who have been the strongest votaries of the Modi government, will have to shell out more on what they earn, services they buy and even on their provident fund — the retirement egg nest.People earning more than Rs 1 crore will have to cough up higher surcharge on their income tax , pay 10% tax on dividend income above Rs 10 lakh, and can no longer escape tax while buying back shares of closely held entities to withdraw cash from family firms. Buying a car — not just the luxury car priced above Rs 10 lakh — imported mobile handsets such as tablets and smartphones and e-reading devices like the Kindle would cost more.And, all kind of taxable services would attract an extra service tax of 0.5% from June 1. The tax on dividend would not only impact the earnings of who’s who of India Inc — such as the Ambanis, Azim Premji Kris Gopalakrishnan , NR Narayana Murthy and Nandan Nilekani — but also several promoters and large shareholders of Indian companies. For those earning more than Rs 1 crore, the surcharge on income tax has been raised from 12% to 15%. “A person with an yearly income of, say, Rs 1.1 crore will have to fork out extra tax of about Rs 96,500.The tax on dividend will hurt several HNIs (high net-worth individuals), Hindu undivided families and partnership firms holding stocks,” said senior chartered accountant Dilip Lakhani.The widened tax base, however, does not include rich farmers who have never been taxed. “The government is concentrating on collecting more tax from existing taxpayers in the salaried class who cannot escape tax. It has not looked at any kind of innovative measure to tax income from agriculture,” said Madan Sabnavis, chief economist at credit rating agency CARE.There is a widely shared perception that the plan to tax 60% of an employee’s contribution to the provident fund at the time of retirement or early withdrawal would meet with strong resistance. The proposed change in the tax law will also lower the amount that shareholders can take out from a privately held business entity. Such fund withdrawals happen through buyback of shares. In many cases, the firm paid the shareholders without deducting any tax and the recipient invested the amount in assets like residential properties to avoid tax. This resulted in several disputes, with the tax department claiming tax on such transactions.The Budget has spelt out all such buybacks in unlisted firms would attract a dividend distribution tax, which works out to 16.75%.