“Every time we present the Budget…I have gone round the country to various destinations, met tax professionals, industry, traders, and all stakeholders, taken their view and brought in amendments so that the Budget will represent the common people’s aspirations.”
The minister was replying about the fresh amendment that was moved in the Finance Bill, allowing taxpayers to select either a 12.5 per cent LTCG rate without indexation or a 20 per cent rate with indexation for property acquired before July 23, 2024.
On moving so many amendments soon after presenting the Budget (even in the past), she said, “Because we heard the people who want something to change, and we have the courage and conviction to change it.”
The original LTCG regime proposed on July 23 Budget, removed the indexation benefit, sparking concerns over real estate transactions.
Defending the move, she said it was removed to simplify the regime and not for revenue consideration.
While highlighting the proposed announcement on taxation, the union minister said that “without drastically increasing taxes, we have brought in a simplified taxation regime and eased compliance.”
“The vision of PM Modi has been to establish a simple, efficient, and fair technology-driven taxation regime in this country. So, simplification and ease of compliance for the taxpayer have been the primary objectives with which, in the last 10 years and this year, in the third term of PM Modi, the approach to taxation has been to simplify it, reduce the burden on the taxpayer, and make sure it is transparent and equitable,” FM said.
She added that this year also, “our approach has been that we bring in greater simplification of tax laws and procedures, and that we enable growth and employment in this country.”
On direct taxes, the minister said that effective tax on annual income of Rs 15 lakh was reduced to 10 per cent in 2023 and further reduced this year as well under the new income tax regime.
She added that till December 31, 2023, about 3.8 per cent of taxpayers opted for the new tax regime, equating to a total of 30.9 lakh individuals. However, the number increased drastically till July 2024.
Talking about tax returns, Sitharaman said, “Average processing time of income tax returns has reduced from 93 days in 2013 to 10 days now.” She said a record number of income tax returns have been filed till July 31, 2024, with about 58.57 per cent of ITRs received from first-time income tax filers.
Further, she elaborated that the rationalisation of Tax Deducted at Source (TDS) rates includes reducing the rate from 5 per cent to 2 per cent and eliminating Section 194F, which previously imposed a 20 per cent rate. These changes are expected to significantly improve cash flow for small businesses, providing them with better financial flexibility and supporting their growth, the minister said.
In search tax cases, the period of assessment now is reduced from 10 years to 6 years and not beyond that. She added that reopening of taxes is simplified: “Assessments may be opened up to 5 years, but for the fourth and fifth year, only if unreported income exceeds Rs 5 lakh,” said Sitharaman.
On the indirect taxation front, she said that a comprehensive review of the rate structure for a greater simplified tax structure for the country as a whole has been announced.
For all the customs sites, several steps have been taken to facilitate the process to become simple and faster.
Addressing the issue of 18 per cent Goods and Services Tax (GST) on health insurance,
FM said, “I want to raise two important points – tax has been there on medical insurance even before the introduction of GST. There was already a pre-GST tax on medical insurance before the GST was introduced. This is not a new issue; it was already there in all the states. Those protesting here… did they discuss the removal of this tax in their states?”
The response came following the issue raised by many opposition members citing Nitin Gadkari’s letter to the finance minister, requesting to withdraw the GST on premiums paid for life and medical insurances.
First Published: Aug 07 2024 | 7:53 PM IST
