New tax regime to benefit middle class as it will leave more money in their hands, says FM Nirmala Sitharaman

Finance Minister Nirmala Sitharaman said the new tax regime will benefit the middle class as it will leave more money in their hands.

After the customary post-Budget address to the central board of the RBI, she said it is not necessary to induce individuals to invest through government schemes but give them an opportunity to make a personal decision regarding investments.

The way we allowed for standard deduction and also the rates which have been fixed, tax rates which have been fixed for different slabs, it has actually left more money in the hands of the people, the taxpayer, the household, she said.

Sitharaman in her latest Budget proposed to extend the Rs 50,000 standard deduction benefit to persons opting for the new tax regime.

I don't think it is necessary for the government to even induce any such measures. A person who earns his money and who runs his household is wise enough to know where he has to put his money. So I've not discouraged him from doing it nor am I incentivizing them to do anything in particular. It's for him to take a call, she said.

Under the revamped concessional tax regime, which will be effective from the next fiscal, no tax would be levied on income up to Rs 3 lakh. Income between Rs 3-6 lakh would be taxed at 5 per cent; Rs 6-9 lakh at 10 per cent, Rs 9-12 lakh at 15 per cent, Rs 12-15 lakh at 20 per cent and income of Rs 15 lakh and above will be taxed at 30 per cent.

Answering a question on the Adani Group crisis, the minister said, Indian regulators are very, very experienced and they are experts in their domain. The regulators are seized of the matter and they are on their toes as always not just now. On regulating cypto assets, she said India is in discussion with G20 nations for designing a common framework.

Responding to a query on price rise, RBI Governor Shaktikanta Das said retail inflation is expected to be around 5.3 per cent in 2023-24 and may fall further if crude prices remain benign. Das said RBI has assumed USD 95 per barrel rate of crude for inflation projection for the next fiscal.

So if the oil prices go down significantly and if there is advantage of other commodity prices, it will work to (our) favour in terms of leading to lower inflation but if demand for oil due to the opening of countries (rises) then the commodity prices may go up, he said