Rs.500 currency note.Reuters

Union Finance Minister Arun Jaitley Saturday proposed to abolish the wealth tax and proposed two percent surcharge on the super rich.

Presenting the budget for 2015-16, Jaitley said the government's goal is to have "minimum government and maximum governance" with the focus on ease of doing business and simplifying tax procedures.

"The total wealth tax collection in the country was Rs.1,008 crore in 2013-14. Should a tax which leads to high cost of collection and a low yield be continued or should it be replaced with a low cost and higher yield tax?" he posed.

Announcing the abolishment of wealth tax, Jaitley said it would be replaced with an additional surcharge of two percent on the super-rich with a taxable income of over Rs.1 crore.

He said the surcharge would fetch tax revenue of around Rs.9,000 crore.

This will lead to tax simplification and enable the department to focus more on ensuring tax compliance and widening the tax base, he said.

"Further, to track the wealth held by individuals and entities, the information regarding the assets which are currently required to be furnished in wealth tax return will be captured in the income tax returns. This will ensure that the abolition of wealth tax does not lead to escape of any income from the tax net," he said.