New Delhi, Aug 7 (UNI) Countering the Opposition charges that tax burden for the Middle class has gone up in the Budget 2024-25, Union Finance Minister Nirmala Sitharaman on Wednesday listed out measures taken to benefit the Middle class and small businesses.
Replying to the discussion on the Finance Bill in the Lok Sabha, the Minister noted that substantial relief has been given to the Middle class in the last two years.
“The government has revised (Income Tax) slabs in the new regime in this Budget (2024-25). Certainly, this has an impact on the Middle class I would believe. Standard deduction for salaried employees has also been increased from Rs 50,000 to Rs 75,000 in the new regime in this Budget,” the Minister said while mentioning other tax proposals providing relief to the citizens.
The Minister also introduced amendments to the Finance Bill offering taxpayers choice in long-term capital gains (LTCG) tax payment on sale of properties purchased before July 23, 2024.
Accordingly, the taxpayers can compute their LTCG tax on transfer of properties under the new scheme at 12.5% without indexation or under the old scheme at 20% with indexation and pay such tax which is the lower of the two.
"The current amendment on long-term capital gains tax is for land and building assets acquired by individuals and HUFs (Hindu Undivided Families) before 23rd July 2024. It stipulates that in the case of transfer of long-term capital asset, being land or building or both, by an individual or HUF which is acquired before 23rd July 2024 the taxpayer can compute his taxes under the new scheme which is 12.5% without indexation and the old scheme which is 20% with indexation and pay such tax which is the lower of the two," Sitharaman said.
She further said, "Not only we are coming up with an option, we are also saying that calculate under both and tell us whichever is lower and pay tax on that. So we have given an option. This ensures no one faces additional tax burden due to this change. In fact, post the presentation of the Budget, amendment now with which we have come in gives an option, gives a fairer option and gives the choice to the property holder who is going to be selling it."
The Lok Sabha passed the Finance Bill 2024 along with the amendments brought by the government by voice vote after the Minister’s reply to the discussion on it.
On demand from many Opposition leaders to remove 18% GST on medical insurance premium, Sitharaman said that tax was levied on medical insurance even prior to the GST regime.
On other suggestions related to GST, she said that they would be taken up with the GST Council.
The Finance Minister highlighted that while most developed countries were increasing personal income taxes during the Covid 19 crisis, India had ensured no further tax burden on citizens to meet Covid expenditure.
"While most developed countries were increasing personal income taxes during the Covid 19 crisis, Prime Minister Modi's direction to me was, totally in contrast to what was happening in developed countries, no tax on our citizens to meet Covid expenditure," she said.
The Minister noted that small, old and petty unverified tax demands of 90 lakh taxpayers were totally removed from the records as announced in the interim Budget of 2024.
"This benefits small businesses and the Middle class," she said.
On the Custom (duty) side, the Minister said that several steps have been taken to facilitate international trade, ensure processes become simpler and faster, and also to lead to lower logistics and compliance cost.
"This would certainly boost domestic production and enhance export competitiveness. ...Lowering down Custom duty on several items listed in the Budget 2024-25 is aimed at reducing the prices of raw materials and inputs, making domestic production far more cost effective," Sitharaman said.
The Minister added that the Finance Bill has proposed rate cuts on certain inputs for labour-intensive industries such as leather and textile sectors that will boost job creation and address duty inversion issues which are prevalent in the textile sector.
"Exemptions and reduction on 27 critical minerals such as lithium, cobalt, and many others are necessary for this country's strategic autonomy duty," the Minister said.
Sitharaman said that the government's approach has been to bring greater simplification of tax laws and procedures and enable growth and employment in the country.
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