New Delhi, Aug 7 Finance Minister Nirmala Sithraman said in the Parliament on Wednesday that the primary aim of the Union Budget for 2024-25 is to simplify the tax regime and ensure equitable treatment of all asset classes, as she confirmed the relaxation of the real estate indexation rules.
Referring to the amendment to the long-term capital gains (LTCG) regime proposed on Tuesday, the Finance Minister said, “The new tax regime is simpler and gives more flexibility to the taxpayer. The old regime is still not dissolved. Individuals can choose between the two regimes."
“This LTCG option on real estate is aimed at no additional tax burden for taxpayers. We have the courage of conviction to change. Amendments in the Budget are brought in even later so that they represent the common people's aspirations.
"The amendment gives a choice to the taxpayer to calculate and see what works better for them. The current amendment ensures that there will be no additional tax burden on the people," she said.
“Under the current amendment, in the case of assets acquired before July 23, taxpayers can compute tax under the old scheme with indexation or new scheme and pay the lower tax. We have given an option,” the Finance Minister explained, adding, "The middle class has been in our mind. Removal of indexation in LTCG on real estate was not done due to revenue consideration but simplification."
She said the middle class has benefited from various tax proposals in Budgets presented by the Modi government.
The effective tax on annual income of Rs 15 lakh was reduced to 10 per cent in 2023, which was further reduced this year as well under the new I-T regime, Sitharaman pointed out.
She also said that the pending litigation and demands sorted under the 'Vivad se Vishwas' scheme helped the middle-class and small businesses.
On the Customs side, the budget Bas taken several steps to boost domestic production and enhance export competitiveness, she said.
Customs duty reductions are aimed at lowering the cost of raw materials. Rate cuts have also been proposed for the labour-intensive industries, along with exemption and reduction on 27 critical minerals such as lithium, cobalt, and duty rate cuts for gold and silver, she added.
The Finance Minister also said that the rate cut in Customs duties on several inputs for leather and textiles is aimed at boosting employment and bringing down costs.
There will be a comprehensive review of the rate structure in the next six months, the Finance Minister said.
She also said that the angel tax has come as a big relief for startups. Angel tax was introduced in 2012, but the UPA government did not remove it, she pointed out.
“We have moved away from the days of tax terrorism," Sitharaman said.
She also said that till July 31 (2024-25 AY), as many as 5.2 crore taxpayers comprising 72.8 per cent of the total have moved to the new tax regime, reflecting the success of the system.
A record 7.28 crore income tax returns have been filed in 2024-25, which is 7.5 per cent higher as compared to the 6.77 crore filed last fiscal. As many as 58.57 lakh were first-time filers in 2024-25, indicating a widening of the tax base.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor