Income Tax: FM Nirmala Sitharaman’s big announcement on the timeline to remove I-T exemptions
Income Tax Exemptions: Finance Minister Nirmala Sitharaman had made a big announcement on the move to remove Income Tax exemptions as announced in the Budget 2020. On Sunday, the FM said that her idea behind introducing another tax slabs without exemptions is to move the country towards a more simplified, exemption-free tax regime which has reduced rates of tax. She added that the government has set no deadline or timeframe to remove all exemptions.
Talking to media in Hyderabad after an interaction with trade representatives and experts on the Union Budget 2020, Nirmala Sitharaman said that right now the government has only started a second alternative which has some exemptions while some other exemptions have been removed. The original intention was to remove all exemptions and offer individuals a clear, simplified and reduced rate of income tax.
In the Budget 2020, Nirmala Sitharaman introduced an alternative tax-regime with more tax slabs which offer taxpayers higher limits provided they forego almost all the existing exemptions and deductions likes home loan interest and other tax savings investments like in life insurance.
On the removal of all exemptions, she said that the government has not made up its mind as yet and is trying step by step to move forward. There is no particular timeline for this, she said on removing all income tax exemptions.
Talking to media after the Budget 2020 on February 1, she said that government intended to remove all income tax exemptions going forward. On Sunday she said that on the basis of simulation and assumption almost 69% of taxpayers would have benefitted and some 11% would have got “attracted” to the new tax regime if it was introduced last year.