A new tax bracket of 45p in the pound for those earning between £75,000 and £125,140 a year has been announced by Scotland’s Deputy First Minister Shona Robison in her Budget statement.
In other areas of tax, the three lowest rates will see no increase to their rates while the starter and basic rate bands will increase by the level of inflation.
The changes will bring in another £1.5 billion to Scotland's finances next year, the Deputy First Minister said.
The move came as Rishi Sunak told MPs at Westminster that Scotland was getting record funding from central Government.
He claimed the UK government was seeking to cut tax, while the SNP was raising it, though freezes in thresholds including for income tax mean that the tax burden is rising towards the highest for decades.
While devolution has brought benefits to Scotland, Ms Robison claimed her administration was "fighting austerity with one hand tied behind our back".
She said: "Devolution has brought many benefits, but it has also exposed quite how beholden we are to the decisions of Westminster. We are fighting Westminster austerity with one hand tied behind our back.
"In today's budget the Scottish Government has no say on corporation tax; no powers to mandate the real living wage for all; no ability to consider windfall levies on excess profits; and no options on wealth taxes like capital gains tax.
"Last month's autumn statement was a worst-case scenario for Scotland.
"A fiscal settlement from the UK Government that undermines the viability of public services across the whole of the UK, including here in Scotland."
The Scottish Government will fully fund its proposed council tax freeze, providing local government with the equivalent of a five per cent rise, while it is set to rise in many parts of England.
Ms Robison said the Office for Budget Responsibility (OBR) projection for inflation next year was three per cent, but she wanted to "go further than that".
"That's why I will fund an above inflation five per cent council tax freeze - delivering over £140 million of additional investment for local services," she said.
"Combined with the other support being provided to local government, this will increase their overall funding by six per cent since the last budget, taking local government funding to a new record high of over £14 billion."She added that at the heart of the Scottish Government's budget is the "social contract" with the people of Scotland.
Addressing MSPs in Holyrood as she published the Government's tax and spending plans, she said: "This is a Government committed to equality through tackling poverty and protecting people from harm.
"At the heart of this budget is our social contract with the people of Scotland where those with the broadest shoulders are asked to contribute a little more.
"Where everyone can have access to universal services and entitlements - and those in need of an extra helping hand will receive targeted additional support.
"This is what we mean when, in the face of Westminster austerity, we say we will always stand up for Scotland."
Scottish income tax is more complex than south of the border and means that there was already a:
* Personal Allowance which goes up to £12,570 before paying the levy
* Starter rate of 19 per cent for earnings between £12,571 to £14,732
* Basic rate of 20 per cent for income of £14,733 to £25,688
* Intermediate rate of 21 per cent for those on between £25,689 to £43,662
* Higher rate of 42 per cent for earnings between £43,663 to £125,140
* Top rate of 47 per cent for incomes over £125,140
The SNP also stood accused of making false claims against the UK Government after alleging that Conservative policies are making Scots poorer.
Scotland’s SNP-led government on Tuesday to unveiled its budget for next year and blames a fiscal black hole on a failure by London to protect public services.
Analysis of House of Commons Library data shows that Londoners on average have paid almost the same amount into the UK budget that Scots receive from it - just over £4,300 in 2021/22 on a net basis.
Among UK regions, only London and Southeast England were net contributors to the national budget, thanks largely to the City’s outsized role as the engine of the services-based economy.
London Minister Greg Hands, who negotiated the current Scottish fiscal framework when he was Treasury chief secretary in 2015/16, said the figures undermined SNP arguments.
"The SNP are falsely claiming they’re short-changed by the UK Government. The reality is the opposite," Mr Hands told the Standard.
"This Government strongly believes in the Union, which is why we’re happy to fund public services in Scotland run by either the UK or the Scottish governments," he said.
"Londoners meanwhile get a good deal by having access to the whole of the UK market for their goods and services."
But Scottish Finance Secretary Ms Robison said that the Commons figures failed to take account of a record £9.4 billion in North Sea energy receipts from Scottish waters amassed in 2022-23.
In addition, more than £1 billion of the notional Scottish deficit is "the direct result of the UK government’s mismanagement of the public finances", she told the Standard.
Ms Robison - who is also deputy first minister - said ahead of her budget that she was being forced into painful choices by the UK Government’s latest spending plans.
"The Autumn Statement was devastating for Scottish finances. The Institute for Fiscal Studies has acknowledged that it will lead to planned real-terms cuts in public service spending," she said.
But the Scottish minister added: "We refuse to follow UK Government spending decisions - indeed, we are doing all we can to mitigate them.
"We are proud that Scotland has a social contract which ensures people are protected by a safety net should they fall on hard times.
"This contract underpins this budget, with targeted funding to protect people and public services."
First Minister Humza Yousaf created the new tax bracket for higher earners in a bid to bring in more revenue, leading to warnings that Scotland could suffer a brain drain to London.
On a visit to RAF Lossiemouth in Moray on Monday, Mr Sunak said it would be "very disappointing to see that tax burden continue to rise in Scotland".
He insisted that London had provided a "record amount of funding to the Scottish government" through the so-called Barnett formula, and the SNP were "ultimately responsible for the finances here in Scotland".
Shadow Scottish Secretary Ian Murray has warned the new higher band could fuel a “brain drain” from Scotland.
He told The Standard last week: “The SNP already have Scots paying the highest tax rates anywhere in the UK, and their failure to grow Scotland’s economy mean they’re looking to increase it even more.
“They need to grow the tax base not milk it with the consequence of more brain drain to London.”
