Citing Q2 growth of 7.6 per cent in FY24, the Union finance minister said the country had the most significant growth making it the fastest-growing economy.
Union Finance Minister Nirmala Sitharaman on the option of lower income tax rates said on Saturday that the government wanted to put the money in hands of the people, particularly the middle class and lower middle class.
Minister’s response came during a press conference in which she was accompanied by Revenue Secretary Ajay Bhushan Pandey, after the budget session.
According to the new tax regime, for incomes between 5 lakh to 7.5 lakh, 10% tax will be deducted; between 7.5 lakh to 10 lakh, 15% tax will be deducted; between 10 lakh to 12.5 lakh, 20% tax will be deducted; between 12.5 lakh to 15 lakh, 25% tax will be deducted and for above 15 lakh, 30% tax will be deducted.
However, the new rates will be applicable only to those individuals who forgo certain exemptions and deductions.
Speaking on the Corporate tax cut Sitharaman said, “Corporate tax cut and benefit derived by new companies, as well as improved GST collections will improve revenue generation and give the comfort to bring down fiscal deficit next year, with disinvestment too improving.”
Finance Minister also said the government has fixed a target to relax fiscal deficit by 0.5 per cent.
“To improve consumption demand, private investment, and public spending and since revenue side could not be pressed further, without violating FRBM (Fiscal Responsibility and Budget Management),” she added.
Reacting on Congress leader Rahul Gandhi’s remarks on the budget that it might be the longest budget speech but it was hollow, Sitharaman said, it was lengthy but I focused on benefits for youth.
“I agree that my budget speech was lengthy but in the speech, I had focussed on and spoken about the schemes for employment for the youth, as well as benefits to them,” she said.
There were some significant changes in the taxation system for the Indian citizens who are living outside the country.
“Some people are residents of no country, they may be staying in different countries for a certain number of days. So, if any Indian citizen is not a resident of any country in the world, he will be deemed to be a resident of India and his worldwide income will be taxed,” Revenue Secretary Ajay Bhushan Pandey told.
Pandey also told that the government has made modifications to the Income Tax Act. If an Indian citizen stays out of the country for more than 182 days, he becomes a non-resident. But now after the modifications in the IT Act, in order to become non-resident, he has to stay out of the country for 240 days.
“We took a comprehensive review of all exemptions and found close to 120 exemptions. In order to offer a simplified system, now the total exemptions which have been removed from the new system are about 70,” he added.