SME Times News Bureau | 01 Feb, 2020
After slashing income tax rates for individuals on condition that they
give up exemptions and deductions, Finance Minister Nirmala Sitharaman on
Saturday said the government intends to remove all IT exemptions in the long
run.
Speaking at a press conference after presenting her second budget, she said
income tax cuts follow reduction in corporate tax rates in September last year
and in the same manner, with or without exemptions.
"We are looking for simplifying rates and reduced rates. Eventually we
want to bring the rates down. So many exemptions are difficult for the
administrators... We wanted to achieve two goals -- simplify and reduce income
tax. Gradually in the long run, we will be removing all exemptions," she
said.
While her budget speech did not provide for any specific number for additional
capital, the Finance Minister said improvement in revenue generation gives
hopes of lowering fiscal deficit to 3.5 per cent of GDP in the next fiscal from
3.8 per cent in the current.
"Under the new personal income tax regime, individual taxpayers to pay tax
at a reduced rate of 10 per cent for income between Rs 5 lakh and 7.5 lakh
against the current rate of 20 per cent," Sitharaman said while presenting
the Budget.
Some exemptions will continue even for the new tax slabs.
The aim for the current reforms is to make sure that the money reaches the
hands of the taxpayer and he is free to use it as he sees fit, she said.