LIVE: FM Nirmala Sitharaman Speaks On Finance Bill 2024 | Indexation Real Estate | Lok Sabha | N18L

Summary

The transcript discusses the government's focus on simplifying the tax regime through technology, with a key emphasis on easing compliance for taxpayers, especially the middle class. Over the last decade, major reforms have been made to reduce tax burdens, including lower personal income tax rates and increased exemptions for salaried employees and pensioners. The introduction of faceless assessments, quicker refunds, and the abolition of Angel tax for startups highlight the government's commitment to transparency and efficiency. Additionally, steps to reduce litigation and promote growth, along with strategic cuts in customs duties, are presented as part of an overall effort to foster economic development and job creation.

Takeaways

• 😀 Technology-driven taxation reforms aim to simplify the tax system and reduce compliance burdens for taxpayers.
• 😀 Significant relief for the middle class in the form of reduced tax liability, with personal income tax slabs revised to reduce the tax burden by up to ₹37,500.
• 😀 Standard deduction for salaried employees has been increased from ₹50,000 to ₹75,000, providing further tax relief.
• 😀 Family pensioners will benefit from an enhanced deduction, raised from ₹15,000 to ₹30,000.
• 😀 Corporate tax reforms, including the introduction of tax on dividend income at the applicable rate, aim to address concerns of unequal tax burdens between corporate entities and individuals.
• 😀 Faceless assessment systems eliminate human interface in tax filings and assessments, aiming to reduce rent-seeking behavior and improve transparency.
• 😀 Pre-filled tax returns, based on third-party information, simplify the filing process, saving taxpayers time and reducing errors.
• 😀 A comprehensive review of the tax rate structure will take place within six months to simplify and streamline India's tax policies.
• 😀 Indirect tax reforms, including reductions in customs duties, aim to lower logistics costs, promote domestic production, and boost export competitiveness.
• 😀 Measures to reduce litigation include the introduction of higher thresholds for filing appeals, simplifying the reassessment process, and the introduction of the 'Vivad Se Vishwas' scheme to settle pending tax disputes.
• 😀 Increased exemptions and relief for small investors, including an enhanced capital gains tax exemption limit of ₹1.25 lakh, benefit the middle class and small businesses.

Q & A

What has been the primary objective of the tax reforms discussed in the speech?

The primary objective has been to simplify the taxation system, reduce the burden on taxpayers, increase transparency, and make the system more equitable. These reforms are designed to enable growth and employment.

How has the government specifically aimed to reduce the tax burden on the middle class?

The government has liberalized the personal income tax slabs, increased the standard deduction for salaried employees, enhanced deductions on family pensions, and raised exemptions on long-term capital gains. These measures are aimed at providing direct financial relief to the middle class.

What is the 'Vivad Se Vishwas' scheme mentioned in the speech?

'Vivad Se Vishwas' is a scheme designed to resolve pending tax disputes by providing a mechanism for taxpayers to settle their cases without lengthy litigation. The government has brought this scheme back to ease the burden of pending cases and promote tax compliance.

How has the government utilized technology in the tax system?

The government has introduced a 'faceless' tax assessment system, which eliminates human intervention, reducing corruption and ensuring transparency. Additionally, pre-filled income tax returns based on verified third-party data have made tax reporting faster and more efficient.

What measures have been taken to support small businesses and startups?

The government has removed angel tax for startups, reduced customs duties on raw materials, and introduced tax relief measures aimed at easing the compliance burden on small businesses and promoting domestic production.

What is the significance of reducing customs duties in the budget?

Reducing customs duties on critical raw materials and inputs aims to lower costs for domestic producers, boost export competitiveness, and foster the growth of labor-intensive industries such as textiles and leather, which can drive job creation.

How does the corporate tax system differ from personal income tax as per the speech?

The speech clarifies that corporate tax rates are not inherently lower than personal income tax rates. Dividends from corporations, taxed at a lower rate at the company level, are now taxed at the applicable rate in the hands of the shareholders, with the wealthiest individuals paying higher taxes.

What has been done to address concerns about the faceless assessment process?

The faceless assessment system was introduced to eliminate human interface and reduce discretion. While some concerns about multiple sections being invoked have been raised, the system aims to be transparent and non-intrusive, allowing taxpayers to interact digitally and resolve issues without direct human involvement.

What has been done to simplify the process for filing tax returns?

The government has introduced pre-filled income tax returns based on verified third-party data, reducing the manual effort for taxpayers. The average time for processing returns has been reduced from 93 days to 10 days, making the entire process more efficient.

How has the government addressed tax litigation and dispute resolution?

The government has focused on reducing litigation by introducing reforms like simplifying the process for reopening tax assessments, reducing the period for reopening to 5 years, and enhancing the monetary limit for filing appeals in tribunals and courts. These steps aim to ease the burden of ongoing legal disputes.