Finance Minister Nirmala Sitharaman has announced a revised tax structure under the new regime that will reduce taxes and leave more money in the hands of the people. She also said during her Budget speech in the Parliament that an annual income of Rs 12 lakh will attract no tax.
Hours after her speech, she addressed a press conference on the Budget, which she said was a response to the ‘voice of the people’.
She said the new income tax will not circumvent the parliament and the government will pass it through the legislative process. “It won’t be done without the approval from parliament, we are going to make it simpler and easier and remove exemptions,” she said while replying to NDTV.
The Finance Minister had said during her speech that a new tax bill will be introduced in the parliament next week amid a buzz that a ‘direct tax code’ would simplify income tax compliance and reform the Income Tax Act, 1961.
Ms Sitharaman also told reporters an estimated one crore taxpayers will pay no income tax due to the hike in the rebate.
“It is a very responsive government…as a result, the income tax simplification which I announced in July is already completed. We shall bring the bill next week. So, if we are talking of reform inclusive of taxation, the work is done,” she told reporters.
On another question, she said that the government is continuing with disinvestment and there is no let-up.
Earlier in the day, Ms Sitharaman proposed a revised structure under which the tax slabs have been broken down. The first slab is up to Rs 4 lakh, in which the tax remains nil. Earlier it was Rs 3 lakh. The next slab is Rs 4-8 lakh where the tax rate is 5%, followed by 10% in the Rs 8-12 lakh slab, 15% in the Rs 12-16 lakh slab, 20% in the Rs 16-20 lakh slab, and 25% in the Rs 20-24 lakh slab. It’s flat 30% above Rs 24 lakh.
Citing an example at the post-Budget press conference, she said that those earning Rs 8 lakh annually will pay Rs 30,000 tax for FY24-25, but after the changed slabs take effect, they will pay only Rs 20,000. Even high earners will benefit from this change, she added.