Finance Minister Nirmala Sitharaman on Sunday said the decision to forgo tax collection from those earning up to Rs 12 lakh per annum was made based on assessment of standard of living of Indians in this middle income segment and was for the people, to the people and by the people of India.
"Prime Minister Modi has always emphasised the recognition and respect for taxpayers, and this has been his resolute stance," Sitharaman told NDTV's Editor-In-Chief Sanjay Pugalia in an exclusive interview.
"He specifically asked me to do something meaningful for the honest taxpayers in the upcoming budget. The aim was to provide relief to individuals earning Rs 1 lakh per month," she said.
"We assessed the standard of living and lifestyle expenses of people earning Rs 1 lakh per month. We wanted to give relief to this section. There has been significant discussion about the middle class, and ensuring their welfare remains a priority," Sitharaman said.
A key focus in this budget is on boosting consumption, as it holds great potential for economic growth. If consumption increases and demonstrates greater investment possibilities, it could serve as a powerful trigger for further economic development, Sitharaman said.
"We are working to strengthen India's fundamentals for achieving developed nation status in 25 years," the finance minister said.
Sitharaman on Saturday said that there will be no income tax payable up to the income of Rs 12 lakh. The rebate goes up to Rs 12.75 lakh, which is the biggest tax relief for India's middle class since 1997.
Income tax benefits across income categories.
Additionally, the new income tax bill is set to come in next week, Sitharaman informed Parliament on Saturday. She said said the work on income tax simplification law that was announced in July last year has been completed within the deadline.
In a post-Budget press conference, Finance and Revenue Secretary Tuhin Kanta Pandey explained that income tax exemption limit was extended as the government thinks an average income of Rs 1 lakh a month should not attract direct taxes.
"We're reducing tax slabs and broadening them. This benefits every taxpayer. Extra rebate for some people has been granted. Money will come back to the economy via consumption, savings or investments," he said.
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