No timeline to remove I-T exemptions: Sitharaman

On Sunday, she said that based on a simulation and assumption, 69 per cent of taxpayers would have benefitted and probably 11 per cent would have been "attracted" had the new tax regime been introduced last year.

Finance Minister Nirmala Sitharaman

 

HYDERABAD :

Finance Minister Nirmala Sitharaman on Sunday said the idea behind introducing second alternative tax slabs sans exemptions is to take the country towards "a simplified, exemption-free and reduced rate of tax regime."

 

However, there was no timeframe set by the government to remove all exemptions, she told reporters here after an interactive session with trade representatives and intellectuals on the Union budget.

 

"At the moment we only started a second alternative with some exemptions removed or some exemptions included, although the original intention was to remove all exemptions and give a clear simplified reduced rate of income tax," the finance minister said.

 

The budget 2020-21 has introduced more tax slabs and offers higher limits provided the taxpayer is ready to forego all the existing exemptions and deductions including home loan interest, other tax savings investments.
 

We have not made up our minds as yet (on the removal of all exemptions)... We are trying step by step, move forward and no particular timeline given," she said when asked if there is any timeframe for removing all income tax exemptions.

 

Addressing a post-budget press conference on February 1, Sitharaman had said the government intended to remove all I-T exemptions in the long run.

 

On Sunday, she said that based on a simulation and assumption, 69 per cent of taxpayers would have benefitted and probably 11 per cent would have been "attracted" had the new tax regime been introduced last year.

 

Sitharaman further said the 2020-21 Union budget was prepared keeping the FRBM (Fiscal Responsibility and Budget Management) in mind even as she maintained she would be remembered for presenting the "longest prepared budget" than for "longest speech" on it.

 

"So in a way all these (measures) and more has been done that the FRBM, as an Act, we have to keep in mind and also comply with it.So we have not really breached the FRBM. We have not gone outlandish on it.We have kept fiscal discipline, which is a USP for both the Atal Bihari Vajpayee government and also for the Shri Narendra Modi Government," she said.

 

The Centre had earlier said it was committed to reduce the fiscal deficit -- the gap between total expenditure and revenue -- to 3% of gross domestic product (GDP) by 2020-21 and eliminate the primary deficit as per the FRBM Act.

 


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