No income tax for people earning up to ₹7.27 lakh per annum under new tax regime, clarifies FM

Finance Minister Nirmala Sitharaman on Friday said the Narendra Modi government has provided several tax benefits to middle class people, including income tax exemption for those earnings up to Rs 7.27 lakh per annum.

Asserting that no section of the society has been left out by the government, she mentioned about skepticism in certain quarters when it was decided to provide income tax exemption for those earnings up to Rs 7 lakh in the Union Budget for 2023-24.

The skepticism was about what will happen to those earnings little more than Rs 7 lakh, she noted.

"So, we sat as a team and went into the details (to find out) at what stage you pay tax for every additional Re 1 you earn... (for instance) for Rs 7.27 lakh, you don't pay any tax now. It is only at Rs 27,000 that the break even comes. After that you start paying tax.

"You have a standard deduction of Rs 50,000 also. Under the new scheme, the grievance was that there was no standard deduction. It is given now. We have brought in the simplicity in the paying rate and the compliance side,” Sitharaman said.

Speaking about the achievements of the government, she said the total budget for the Micro, Small and Medium Enterprises (MSME) has increased to Rs 22,138 crore for 2023-24 compared to Rs 3,185 crore in 2013-14.

This is a jump in budgetary allocation by almost seven times in nine years, symbolising the government's unwavering commitment to empower MSME sector, she said.

Under the 'Public Procurement Policy for Micro and Small Enterprises' scheme, she said 33 per cent of the total procurement made by 158 Central Public Sector Enterprises has been from MSMEs and that is the highest ever till date.

"We launched the TReDS platform (Trade Receivables Discounting System) so that the MSMEs and other corporations do not have to face any liquidity crunch due to non-payment by their buyer," she said.

Sitharaman said the ONDC (Open Network for Digital Commerce) has enabled MSME businesses to reach out to a larger potential customer base and added that the world appreciates that India has set up a public platform comparable to the 'Amazons of the world'.

Pointing out that India's efforts to improve the ease of doing business are being acknowledged on the global stage, the minister said the country's ranking in the World Bank's Ease of Doing Business Index surged from 142 in 2014 to 63 in 2019.

"We have reduced unnecessary compliance burden by repealing more than 1,500 archaic laws and nearly 39,000 compliances. Decriminalisation of the Companies Act has happened," she noted.

The Finance Minister also inaugurated the Common Facility Centre (CFC) at the Indian Institute of Gems and Jewellery (IIGJ) in Udupi.

In 2017, while serving as the Commerce and Industries Minister, Sitharaman had laid the foundation stone of IIGJ in Udupi. The facility has been set up with her MPLADS (Members of Parliament Local Area Development Scheme) funds as well as support from the Gem & Jewellery Export Promotion Council & National Institute of Design, Ahmedabad.

The institute will provide training to the youth in the region in various aspects of hand-crafted jewellery making.

Earlier in the day, Sitharaman visited Adamar Mutt and Sri Krishna Temple in Udupi.