FM Nirmala Sitharaman Announces Income Tax Exemption Up To Rs 7.27 Lakh Under New Tax Regime

Finance Minister Nirmala Sitharaman announced on Friday that the Narendra Modi administration has implemented several tax breaks for the middle-class, one of which includes an exemption from income tax for individuals earning up to Rs 7.27 lakh per annum, PTI reported.

She acknowledged the skepticism expressed in some quarters regarding the income tax exemption threshold of up to Rs 7 lakh, as outlined in the Union Budget for 2023-24. Concerns were raised specifically about the treatment of individuals earning slightly above Rs 7 lakh.

"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.

Highlighting the government's achievements, the Finance Minister emphasized the significant growth in the budget allocated to Micro, Small, and Medium Enterprises (MSME). She stated that the budget for MSMEs has experienced a remarkable increase, soaring from Rs 3,185 crore in 2013-14 to a substantial Rs 22,138 crore for the fiscal year 2023-24.

This substantial rise in budgetary allocation exemplifies the government's unwavering dedication to empowering the MSME sector. Over the course of the past nine years, the budget for MSMEs has expanded nearly sevenfold, reflecting the government's commitment to fostering the growth and development of small and medium-sized businesses.

She asserted that 33% of all purchases made by 158 Central Public Sector Enterprises were made by MSMEs under the "Public Procurement Policy for Micro and Small Enterprises" initiative, the greatest percentage to date.

This achievement highlights the government's commitment to promoting and supporting the growth of MSMEs.

Sitharaman further stated that the implementation of the Open Network for Digital Commerce (ONDC) has provided MSME enterprises with the opportunity to connect with a larger customer base.

FM inaugurated the Common Facility Centre (CFC) at the Indian Institute of Gems and Jewellery (IIGJ) in Udupi, marking a significant milestone in the development of the gem and jewellery industry.