No timeline yet for phasing out income tax exemptions: FM
HYDERABAD [Maha Media]: Union Finance Minister Nirmala Sitharaman on Sunday said that there is no timeline for phasing out exemptions on personal income tax for those who opted to remain in the old regime.
She told a news conference here that her ministry wants to move step by step to achieve the eventual goal of a simplified, exemption-free and reduced rate of tax incidence.
"We have not made up our mind," she said when asked what would be the time frame to phase out exemptions.
"At the moment we have only started second alternative with some exemptions removed or some exemptions included, although the original intention was to remove all exemptions and give a clear simplified reduced rate of income," she said.
The minister said the gradient of increase of income tax for different income slabs is gentle and there is no sharp increase.
"This year, while proposing the second alternative we have not compelled anyone to leave the exemptions and come here (second alternative). For the sake of clarity we also issued a complete matrix, explaining the net gain for a particular income."
Sitharaman also said it was up to the assessee to decide and the ministry would not force anyone to come to the new system.
She, however, pointed out that a simulation model worked out on the basis of an assumption that second alternative had been introduced in the last year revealed that 69 per cent would have net benefit and about 11 per cent would have want to opt for second alternative because of the simplification of the process.
"I am not aware of any such measure," she said when asked to comment on reports that the circulation of Rs 2,000 notes were being restricted. She said it was not proper for her to respond to allegations.
She also evaded reply to a query about banks voicing concern over the likely impact of the Supreme Court's order to the telecom companies to pay their dues to the department of telecom ministry.
"The concerned ministry (Communications Ministry) is looking into. It is not proper for me to comment," she said.
Sitharaman was talking to the media after interacting with representatives of trade and industry and other stakeholders on Union Budget.
She said this the ministry started this exercise taking the budget to different cities by meeting industry trade bodies, domain experts, economists and others, make clarifications which they might want, and explain aspects of budget.
She said the exercise was already completed in Delhi, Mumbai, Chennai and Kolkata. She will have a similar meeting at Bengaluru on Monday. Similar interactions are planned in Guwahati and Lucknow.