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Informist, Tuesday, Jul 23, 2024

--Sitharaman: Intend to bring down tax incidence 
--Sitharaman refuses comment on sun-setting old income tax regime 
--Sitharaman: Aim is to move towards a simpler tax regime 
--Sitharaman: Non-tax revenue to offset revenue loss from tax tweaks 
--Sitharaman: Asset monetisation is not only selling of assets 
--Sitharaman: Looking to generate resources from newer areas 
--Sitharaman: See revenue mobilisation from PSU dividend as well 
--Sitharaman: Dividend from PSUs is increasing 
--Sitharaman: India's tax net will have to be widened 
--Sitharaman: Attempt to widen India's tax net 
 

NEW DELHI - The government has not yet set a sunset deadline for discontinuing the incentivised old tax regime, Finance Minister Nirmala Sitharaman said today. "As per data available till now for the last fiscal, more than two thirds have availed the new personal income tax regime," Sitharaman said at a post-Budget press conference. There were doubts whether the government was looking at discontinuing the old tax regime since the majority of taxpayers have shifted to the new tax regime.

The government had introduced a new simplified tax regime in the Budget for 2020-21. While the Budget presented today provided some relief to the middle class opting for the new regime in terms of tax obligation, it did not tweak tax slabs for taxpayers opting for the old tax regime. Under the old regime, taxpayers can claim deductions under various sections of the Income Tax Act, while the new one eliminates most deductions and offers lower tax rates instead.

The Budget proposed changes to three income tax slabs under the new regime. Income between 300,000 to 700,000 rupees will now be taxed at 5% tax instead of the 300,000-600,000 rupees slab earlier. Similarly, slabs of 600,000 to 900,000 rupees and 900,000 to 1.2 mln rupees have been changed to 700,000 to 1 mln rupees and 1 mln to 1.2 mln rupees, respectively. The tax for these two slabs will remain at 10% and 15%, respectively. There is no change in other tax slabs.

Addressing the press conference, Sitharaman said that the government aims to bring down tax incidences as well as make it simpler for taxpayers. This will also help in widening the tax net, she said.

As a result of proposed tax changes in the Budget, the revenue foregone by the government will be to the tune of about 370 bln rupees, of which 290 bln rupees will be in direct taxes and 80 bln rupees in indirect taxes. However, almost 300 bln rupees are expected to be mobilised by the government through various non-tax revenues, Sitharaman said.

Over the last few years, public sector enterprises have started performing better, the finance minister said. As a result, dividend from PSUs has grown significantly. This dividend along with receipts from asset monetisation will help the government in mitigating the revenue loss due to tax changes.  End

Reported by Sagar Sen, Priyasmita Dutta annd Krity Ambey

Edited by Vandana Hingorani

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