NEW DELHI: Union Finance Minister Nirmala Sitharaman toay, February 10, said that the new tax regime, which offers a rebate on annual income of up to Rs. 7.00 lakh, will leave higher disposable income in the hands of people.
Mooting the discussion on Union Budget for 2023-24 in the Lok Sabha, Finance Minister said the Budget astutely balances the requirement of development imperatives within the limits of fiscal prudence.
The FM said the Budget focuses on the middle class, employment generation, Ministry of Micro, Small & Medium Enterprises, Agri sector, rural population, health and green growth.
Finance Minister said the new tax regime announced in the Budget is attractive' as the tax exemption limit has been hiked to Rs 3.00 lakh, from Rs 2.5 lakh earlier. In addition, a standard deduction of Rs 50,000 too has been allowed under the scheme.
She said, the bulk of middle-class taxpayers will profit from this new tax structure because the rebate is available for incomes up to Rs 7 lakh. Since the increased refund ceiling is unconditional, she added, "it leaves higher disposable income in the hands of citizens."
For income up to Rs 3 lakh, there will be no taxation under the revised concessional tax regime, which will take effect in the upcoming fiscal. Income between Rs. 3-6 lakh would be taxed at a rate of 5%; Rs. 6-9 lakh at a rate of 10%; Rs. 9-12 lakh at a rate of 15%; Rs. 12-15 lakh at a rate of 20%; and Rs. 15 lakh and above at a rate of 30%. However, there would be no taxation on income up to Rs 7 lakh per year.
In response to RSP member NK Premachandran's statement that the new tax regime will not benefit someone earning Rs 9 lakh per year with an investment of Rs 4.5 lakh in tax savings instruments, Sitharaman replied that saving Rs 4.5 lakh will be a "effort-ridden activity" for that individual.
For someone making Rs. 9 lakh, Sitharaman remarked, "it's not always realistic to have Rs. 4.5 lakh in savings and then have enough money to spend on your family."
The minister added that the budget maintained the fiscal restraint that had been promised in the preceding fiscal glide path.
It is an extremely delicately balanced budget, according to Sitharaman, who also noted that the administration picked capital spending as a strategy to boost the economy because of its stronger multiplier effect.
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