New Delhi: Describing the new tax regime as "very attractive", Union Finance Minister Nirmala Sitharaman on Friday said that the new regime, under which rebate on annual income of up to Rs 7 lakh is provided, will result into people with higher amount of disposable income in their hands. She was replying to the discussion on the Union Budget in the Lok Sabha.
The Finance Minister also said that the Union Budget 2023-24 strikes a delicate balance between the requirement of development imperative while staying within the limits of fiscal prudence. She also said that the Union Budget emphasises issues such as MSME, the agricultural sector, the rural population, the middle class and health.
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Pointing out that the under the new tax regime the tax exemption has been increased to Rs 3 lakh, from Rs 2.5 lakh earlier adding that the new regime also allows a standard deduction of Rs 50,000. "Since the enhanced rebate limit is unconditional, it leaves higher disposable income in the hands of people," said Sitharaman.
In response to RSP MP NK Premachandran's argument that the new tax regime will not provide any relief for a person with an annual income of Rs 9 lakh, the Finance Minister said "For a person earning Rs 9 lakh, it's not always possible to have Rs 4.5 lakh as saving and then also have enough money to spend on your family."
"It is a very, very delicately balanced Budget," Sitharaman said. She also said that the government has decided to increase capital expenditure as it has a "greater multiplier effect." (with Agency inputs)
