Finance Secretary Tuhin Kanta Pandey said on Sunday that over two crore people will benefit from the changes in slabs and rates under the new income tax regime. In an interview with businessline, he also revealed that more green subsidiaries of central public sector enterprises (CPSEs) will enter the stock market.
“Nearly five crore people were benefiting because of rebates up to ₹7 lakh. As the rebate has now been enhanced to ₹12 lakh, add one crore more taxpayers to that number. This means that nearly six crore taxpayers are not required to pay income tax now. With the change in rates and slabs, over two crore permanent taxpayers will get the benefit,” Pandey said. Further, he emphasised that out of the remaining permanent taxpayers, each one will benefit as rate transmission will be for everyone.
In her Budget speech, Finance Minister Nirmala Sitharaman announced that no income tax would be payable on income up to ₹12 lakh (₹12.75 lakh for salaried) under the new regime. Additionally, slabs and rates were adjusted across the board to benefit all taxpayers.
“The new structure will substantially reduce taxes for the middle class, leaving more money in their hands, thereby boosting household consumption, savings and investment,” she said.
Tax Simplification
When asked whether the old tax regime will die a natural death, Pandey said: “We are simply making the new scheme more attractive.”
Further, it is not necessary to do anything regarding the old tax regime. “We are focusing on a simple explanation — you do not have to pay tax if your annual income is ₹12 lakh (₹12.75 lakh in the case of a salaried individuals). We are not making things complicated by saying that you will get this much relief under Sections 80C, 80D or 80CCD. Let’s not get into micro-management of individual behaviour,” he said.
Corporate tax
Non-corporate assessees include trusts, firms, NGOs and charitable institutions, apart from individuals. We will have to find a way for a separate challan for individuals as other rates are different. In other words, growth in terms of others should be seen from a business point of view. As of now, there is an aberration in accounting. Coming to corporate tax, we have assumed a buoyancy of 1.03 and in non-corporate tax, it is 1.42. This means corporate tax collection is growing according to the GDP growth rate and we expect earnings to pick up.
Disinvestment plan
Pandey was DIPAM Secretary before moving to the Department of Revenue just before the Budget. On the issue of disinvestment, he said that there is a framework to separate the green ventures as a subsidiary for CPSEs.
“We said if you want to raise money to create assets, then go to the market. Now, after NTPC, others are also following the same model, whether it is NHPC or NLC. Indian Oil and ONGC can also take the same route for some of their subsidiaries. We have seen some progress in the case of NLC as they have already set up a company. SJVN can also do the same thing,” he said.
Interview on p7
