The Lok Sabha passed the Finance Bill 2024-25 on Wednesday with Finance Minister Nirmala Sitharaman saying that the government strived for simplification of tax laws and procedures to allow for growth and employment in India.
The Finance (No 2) Bill, 2024, was passed following Sitharaman's reply. The House rejected the amendments moved by the opposition by a voice vote.
Sitharaman said that the vision of Prime Minister Narendra Modi led to establishing a simple, efficient and fair technology-driven taxation regime in the country.
The Finance Minister said, "So, simplification and ease of compliance for the taxpayer has been the primary objective with which in the last 10 years, and this year, in the third term of PM Modi, the approach to taxation has been to simplify it, reduce the burden on taxpayer and make sure it is transparent and equitable."
"This year also, our approach has been that we bring in greater simplification of tax laws and procedures, and that we enable growth and employment in this country," she added.
Notably, Sitharaman had presented the Union Budget in the Parliament on July 23. It was the first full budget of the NDA government led by PM Modi. This was after the BJP-led alliance secured a third successive term in the elections this year.
The Lok Sabha initiated discussions on the Finance Bill after passing the Appropriation Bill for the central government's 2024-25 expenditure on Monday.
Finance Minister Nirmala Sitharaman highlighted that the BJP-led government has once again revised the tax slabs in the new tax-filing regime introduced in the Union Budget last month. She emphasized that the government avoided imposing additional taxes during the Covid pandemic to manage its expenditure, and the current approach is focused on simplifying taxation and easing the burden on taxpayers.
Responding to opposition accusations that the government has burdened taxpayers through both direct and indirect taxes, Sitharaman pointed out that the government has increased the standard deduction for salaried employees, raised the exemption limit for capital gains on certain listed financial assets, and eliminated the angel tax.
"The standard deduction for salaried employees has been raised from Rs 50,000 to Rs 75,000 in the new regime, providing an effective relief of up to Rs 17,500," she said. She also noted that personal income tax slabs were significantly liberalized in 2023, reducing tax liability by Rs 37,500 for all taxpayers, and these slabs have been further revised in the new regime.
Sitharaman stated that these measures are designed to benefit the middle class. For the lower and middle-income groups, she proposed increasing the capital gains exemption limit on certain listed financial assets from Rs 1 lakh to Rs 1.25 lakh annually in her Budget speech.
The Union Budget for 2024-25 set the fiscal deficit target at 4.9 per cent of the gross domestic product (GDP), with a plan to reduce it to below 4.5 per cent by the financial year 2025-26. The fiscal deficit represents the difference between the government's total revenue and total expenditure.
The government maintained the capital expenditure outlay at Rs 11.11 lakh crore for 2024-25, as previously announced by Sitharaman in her interim Budget ahead of the General Elections. Capital expenditure refers to spending on long-term physical or fixed assets.