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No Income Tax Will Be Paid By Those Making Up To Rs 7.27 Lakh Per Year, According to FM’s New Tax Regime

Nirmala Sitharaman, the finance minister, said on Friday that the Narendra Modi administration has given middle-class citizens many tax breaks, including an exemption from paying income tax on income up to Rs 7.27 lakh annually.

She noted the mistrust in certain quarters when it was decided to grant income tax exemption for people earning up to Rs 7 lakh in the Union Budget for 2023–24 while asserting that no segment of society had been left out by the government.

The uncertainty centered on what would happen to those profits, which were little over Rs 7 lakh, she said.

As a result, “we convened as a team and delved into the technicalities (to figure out) at what time you pay tax for every extra Re 1 you make… (for example), you don’t pay any tax today for Rs 7.27 lakh. Only at Rs 27,000 does it become profitable. You then begin paying taxes.

“You are also entitled to a standard deduction of Rs. The complaint with the new system was that there was no standard deduction. It is presently provided. We have made the payment rate and the compliance side simpler,” Sitharaman added.

Speaking of the government’s accomplishments, she said that the entire budget for Micro, Small and Medium Enterprises (MSME) grew from Rs 3,185 crore in 2013–14 to Rs 22,138 crore for 2023–24.

The government’s persistent commitment to empowering the MSME sector is symbolized by this increase in budgetary allocation, which has increased almost seven times in the last nine years, she added.

She claimed that 33% of all purchases made by 158 Central Public Sector Enterprises under the “Public Procurement Policy for Micro and Small Enterprises” initiative came from MSMEs, which is the greatest percentage to date.

We created the Trade Receivables Discounting System (TReDS) platform, she said, “so that MSMEs and other businesses wouldn’t experience any cash flow problems as a result of a customer’s failure to pay.”

According to Sitharaman, the Open Network for Digital Commerce (ONDC) has made it possible for MSME enterprises to connect with a bigger pool of prospective clients. She also remarked that the world respects India’s establishment of a public platform equivalent to the “Amazons of the world.”

The minister said that the world is taking notice of India’s efforts to make doing business easier, noting that the nation’s rating in the World Bank’s Ease of Doing Business Index increased from 142 in 2014 to 63 in 2019.

“By abolishing more than 1,500 antiquated rules and about 39,000 compliances, we have decreased the burden of unneeded compliance. The Companies Act has been decriminalized, she said.

The Common Facility Centre (CFC) at the Indian Institute of Gems and Jewellery (IIGJ) in Udupi was also opened by the finance minister.

Sitharaman laid the cornerstone for IIGJ in Udupi in 2017 when she was the minister of commerce and industries. Her MPLADS (Members of Parliament Local Area Development Scheme) money, together with assistance from the Gem & Jewellery Export Promotion Council & National Institute of Design, Ahmedabad, were used to establish the facility.

The institution will instruct young people in the area in all facets of manufacturing handmade jewelry.

Sitharaman went to the Adamar Mutt and the Sri Krishna Temple in Udupi earlier in the day.

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