Without drastically raising taxes, govt has simplified taxation, benefiting middle class: Nirmala Sitharaman in Finance Bill reply

The passage of the Finance Bill by Parliament completes the budget process. The Appropriation Bill for the central government’s expenditure for 2024-25 was passed by the House on Monday.

In her reply, Sitharaman said that without drastically increasing taxes, Modi govt has brought in simplified taxation regime and eased compliance.

The middle class benefitted from various tax proposals in budgets brought by Modi government, she said.

Here is a round-up of what the Finance minister said in her reply:

• Effective tax on annual income of Rs 15 lakh was reduced to 10% in 2023 and further reduced this year as well under new I-T regime, Sitharaman noted, adding that pending litigation and demands sorted under Vivad se Vishwas scheme helped middle class and small businesses.
• The Finance minister further said that increasing LTCG tax exemption limit to Rs 1.25 lakh from Rs 1 lakh will help middle class invest in the stock market.
• The customs duty cut on labour intensive leather and textile sectors will promote trade and employment, the Finance minister remarked.
• On I-T returns, Sitharaman pointed out that the average processing time of income tax returns has reduced from 93 days in 2013 to 10 days now.
• 7,754 tax appeals will be withdrawn from various judicial fora due to upward revision of monetary limit for filing appeals, the minister informed the Lok Sabha.
• As many as 5.25 cr taxpayers or 72.8 pc of individuals choose new I-T regime
• Taxpayer can compute liability on sale of land, buildings acquired before July 23, 2024, on lower of the new and old LTCG tax rates
• The current amendments ensure there will be no additional tax burden with regard to LTCG tax on real estate sale
• We did not remove indexation benefit on LTCG tax to increase revenue; rollover provision exists if capital gains invested in new properties
• The LTCG tax proposal on real estate is being amended to give option to taxpayers to compute tax liability under the old system or at reduced rates without indexation, and pay the lower of the two.
• The current amendments ensure there will be no additional tax burden with regard to LTCG tax on real estate sale.
• Taxpayer can compute liability on sale of land, buildings acquired before July 23, 2024, on lower of the new and old LTCG tax rates.