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No timeline to remove I-T exemptions; intention to give simplified reduced rate of income tax: Nirmala Sitharaman

Press Trust of India

Hyderabad: Finance Minister Nirmala Sitharaman on Sunday said the idea behind introducing second alternative tax slabs sans exemptions is to take the country towards "a simplified, exemption-free and reduced rate of tax regime."

However, there was no timeframe set by the government to remove all exemptions, she told reporters here after an interactive session with trade representatives and intellectuals on the Union budget.

"At the moment we only started a second alternative with some exemptions removed or some exemptions included, although the original intention was to remove all exemptions and give a clear simplified reduced rate of income tax," the finance minister said.

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman addresses during a press meet in Kolkata. PTI

File image of Union Finance Minister Sitharaman. PTI

The Budget 2020-21 has introduced more tax slabs and offers higher limits provided the taxpayer is ready to forego all the existing exemptions and deductions including home loan interest, other tax savings investments.

"We have not made up our minds as yet (on the removal of all exemptions)... We are trying step by step, move forward and no particular timeline given," she said when asked if there is any timeframe for removing all income tax exemptions.

Addressing a post-Budget press conference on 1 February, Sitharaman had said the government intended to remove all I-T exemptions in the long-run.

On Sunday, she said that based on a simulation and assumption, 69 percent of taxpayers would have benefitted and probably 11 percent would have been "attracted" had the new tax regime been introduced last year.

When asked about the Supreme Court order on telcos' payment of dues and the concerns expressed by some bankers, Sitharaman said it may not be proper for her to comment on the matter as there is a ministry concerned looking into it.

"The ministry concerned is looking into it. So, it may not be proper for me to comment on it," she added.

To a query on allegations by the Telangana government that there was a decline in devolution of funds to states from the Centre, she said the allocation is followed as per the recommendations of the finance commissions and it is not true that the centre is not cooperating with states.

Also See: Income tax: Taxpayers should evaluate previous, latest slabs before finalising option; here's all you need to know about two regimes

I-T dept seizes tax evaders’ assets worth Rs 1,052 cr till January this fiscal, carries out searches on 893 groups, says Nirmala Sitharaman

Tax dept asks officers working from home to chase large taxpayers for dues over phone or email

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