Finance Minister Nirmala Sitharaman, who presented her 5th Budget in Parliament, said at the post-Budget press conference on Wednesday that it is moving towards becoming a $5 trillion economy.
His budget announcement elicited a mixed-bag response from various quarters.
The Finance Minister said the government has made ‘substantial changes’ in its structure to make the new income tax regime more attractive to taxpayers and thus benefit the middle class. Budget 2023-24 has proposed changes to the alternative tax regime, which was introduced in 2020-21.
Talking to reporters after presenting the budget, Sitharaman said that the country is looking forward to a direct tax regime that is simple and easy to comply with.
The Finance Minister said, “A lot of changes have been made in personal income tax (in the budget), which will benefit the middle class. The new taxation regime has now got more traction and encouragement, so that people can now switch from the old to the new without any hesitation.” can go.” Told.
As per the changes proposed in the budget, no tax will be levied on people with an annual income of up to Rs 7 lakh under the new tax regime, but no changes have been made for those who continue in the old regime to avail tax exemptions and deductions. provide. On investments and expenses like HRA.
In what is being seen as a push for the salaried class to move to the new tax regime, where no exemption is provided on investments, the finance minister in his Budget for 2023-24 introduced a standard deduction of Rs 50,000 under the new regime. was allowed.
The old tax regime provides for the same deduction and no tax on income up to Rs 5 lakh.
Sitharaman said the government wants to make the new tax regime very attractive and taxpayers should not be burdened with compliance. However, if one feels that the old system is more beneficial, one can continue in it.
“It is in the ultimate interest to make the simplified (new) regime more attractive,” Sitharaman said.
Revenue Secretary Sanjay Malhotra said that most individual taxpayers would find it more attractive to shift to the new regime.
However, Malhotra did not give details of the number of taxpayers moving to the new tax regime from 2020-21 onwards.
Under the new tax regime, no tax will be levied on income up to Rs 3 lakh. Income between Rs 3-6 lakh will be taxed at 5 per cent; Rs 6-9 lakh will be taxed at 10 per cent, Rs 9-12 lakh at 15 per cent, Rs 12-15 lakh at 20 per cent and Rs 15 lakh and above at 30 per cent. “I propose to extend the benefit of standard deduction in the new tax regime. Every salaried individual earning Rs 15.5 lakh or more will get a benefit of Rs 52,500,” Sitharaman said.
(with PTI inputs)