“Trust first, scrutinize later”: The move by Narendra Modi-led NDA government has reaffirmed their commitment towards the welfare of aam aadmi (common man) through their move giving relief in tax burden.
As announced by Finance Minister Nirmala Sitharaman, under the new tax regime, individuals with an income of up to Rs. 12 lakh will pay no income tax.
She has also unveiled several key changes in the Union Budget in a bid to simplify taxation and provide relief to various segments of taxpayers.
The notable adjustments are revisions to the Tax Deduction at Source (TDS) limits, introduction of new tax slabs for individuals, and enhanced benefits for senior citizens which showcases the government’s commitment.
Tax rebate is being provided in addition to the benefit due to slab rate reduction in such a manner that there is no tax payable by them.
“The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment,” the Finance Minister said.
With the new arrangement coming into play, a taxpayer earning Rs 12 lakh will get a benefit of Rs 80,000. This is 100% of the tax payable under the existing system.
Further, an individual earning Rs 18 lakh will receive a tax benefit of Rs 70,000, amounting to 30% of the tax payable as per current rates.
Those with Rs 25 lakh, will gain a Rs 1.1 lakh tax benefit, which is 25% of the tax payable under existing rates.
Further, the surcharge on income tax for high earners has also been revised. Those with income between Rs 50 lakh and Rs 1 crore will attract 10% surcharge; between Rs 1 crore and Rs 2 crore – 15% surcharge; and income exceeding Rs 2 crore – 25% surcharge.
Notably, the surcharge applies to individuals and families whose total income exceeds these thresholds.
With these reforms, the Narendra Modi government is aiming to achieve good governance for the people and economy, which primarily involves being responsive.
The Union government has also taken care of the senior citizens as it introduced a substantial increase in the tax deduction limit for interest income, raising it from Rs 50,000 to Rs 1 lakh.
The move showcases the government’s efforts at reducing the tax burden on seniors who largely rely on interest from savings for their post-retirement income.
All eyes will now be on the new income-tax bill, which is to be rolled out next week, which the Finance Minister believes will carry forward the spirit of ‘Nyaya’.