Amid Opposition allegations that the Government had given the short shrift to the middle class and was taxing it heavily, Finance Minister Nirmala Sitharaman Wednesday said in the Lok Sabha that a number of tax relief measures had been taken for the middle class. She also denied charges that the corporates were being taxed less than earlier.
“Several members have spoken about the tax burden on middle class. In 2023, the slabs for personal income tax were significantly liberalised. All taxpayers had reduced liability of `37,500. We have again revised slabs in new regime. Standard deduction for salaried employees has also been increased from `50,000 to `75,000. Deduction on family pension for pensioners is proposed to be enhanced from `15,000 to `30,000. Deduction on employer’s contribution in case of public and private sector banks has been raised from 10% to 14%,” Sitharaman said in reply to the debate on Finance Bill, which was passed by voice vote.
“The narrative that corporate taxes are lower than personal income taxes is not based on facts. Corporate is a legal entity. The dividend income is also part of the corporate profits. This was earlier taxed at a lesser rate in the hands of the company. In 2020, we started taxing it in the hands of the shareholders at the applicable rate. This effectively means that richer shareholders will pay tax on dividends at 39%,” she said.
Sitharaman said that through the Vivad se Vishwas scheme pending litigations have been sorted out. “Data shows the beneficiaries are MSMEs, individuals and small companies. Small, old and petty, unverified tax demands of 90 lakh taxpayers have been totally removed from the records. This is also a relief to the middle class segment,” she said.
With Opposition parties using her colleague and Union Minister Nitin Gadkari’s demand for reduction in GST on health insurance premium to attack the government, she said Parliament was not the forum to decide the GST rates and it has to go to a council.
Opposition MPs walked out from Lok Sabha after an amendment moved by RSP member N K Premachandran, seeking withdrawal of 18% GST on medical and life insurance premiums, was not taken up.
SAD MP Harsimrat Badal said, “If you earn money you pay tax, if you spend money, you pay tax, if you save or invest money, you pay tax, if you pay tax then also you have to pay tax in the form of cess…It should be called tax trap bill.” Vishal Prakashbapu Patil, an Independent MP from Sangli, said: “We used to hear Robinhood stories during childhood but here a reverse Robinhood is going on.”
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