Sitharaman Comments on Tax Exemption says, ‘No income tax till Rs 7.27 lakh per annum under new tax regime’

New Delhi, 15th July 2023: Union Finance Minister Nirmala Sitharaman said in Udupi on Friday that the Narendra Modi government has granted various tax breaks to the middle class, including income tax exemption for those earning up to Rs 7.27 lakh per year.

Asserting that the government has not excluded any segment of society, she cited scepticism in some 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.

She said that the scepticism was about what would happen to those profits of less than Rs 7 lakh.

Sitharaman said, “So, we sat as a team and went into the details (to find out) at what stage you pay tax for every additional Re 1 you earn… (for instance) for Rs 7.27 lakh, you don’t pay any tax now. It is only at Rs 27,000 that the break even comes. After that you start paying tax.”

She further said, “You have a standard deduction of Rs 50,000 also. Under the new scheme, the grievance was that there was no standard deduction. It is given now. We have brought in the simplicity in the paying rate and the compliance side.”

Speaking about the government’s accomplishments, she stated that the entire budget for Micro, Small and Medium Enterprises (MSME) has climbed to Rs 22,138 crore for 2023-24, up from Rs 3,185 crore in 2013-14.

This represents an almost sevenfold increase in budgetary allocation in nine years, she said, demonstrating the government’s unwavering commitment to empowering the MSME sector.

She stated that under the ‘Public Procurement Policy for Micro and Small Enterprises’ initiative, MSMEs accounted for 33% of total procurement made by 158 Central Public Sector Enterprises, the highest ever recorded.

She said, “We launched the TReDS platform (Trade Receivables Discounting System) so that the MSMEs and other corporations do not have to face any liquidity crunch due to non-payment by their buyer.”

Sitharaman stated that the ONDC (Open Network for Digital Commerce) has helped MSME enterprises to reach out to a bigger potential client base and that the world respects India’s establishment of a public platform equivalent to the ‘Amazons of the world’.

In addition the Finance Minister also inaugurated the Indian Institute of Gems and Jewellery (IIGJ) in Udupi’s Common Facility Centre (CFC).