BUDGET OPEN HOUSE: TAXES HAVE NOT BEEN INCREASED BECAUSE I WANT MORE MONEY, SAYS FM SITHARAMAN

Days after presenting the Union Budget 2024, Finance Minister Nirmala Sitharaman said that taxes have not been increased because the government wants more money but to ensure all budget classes are treated similarly.

“Taxes have not been increased because I want more money… The decision is based on the idea that every asset class has to be treated similarly,” Sitharaman said at an industrial interaction ‘Budget Open House’ organised by The RP Sanjiv Goenka group in partnership with CNBC-TV18.

The remarks come after the Budget 2024 proposed for income tax rates on capital gains to be revised under the new regime.

Short-term capital gains (STCG) tax rates on listed equity shares, equity-oriented mutual funds, and units of business trusts have increased from 15% to 20%.

Meanwhile, the LTCG tax rate has been adjusted from 10% to 12.5%. Additionally, the exemption limit for LTCG has been raised from ₹1 lakh to ₹1.25 lakh.

For assets other than listed securities, the LTCG tax rate has been standardised at 12.5%, replacing the previous 20% rate with indexation benefits.

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Amid concerns raised by the Opposition and several investors on removing the indexation benefit on the sale of old property, when asked if the move would be reviewed, FM said, “I will hear all comments and suggestions with respect to tax changes but the Finance Bill now rests with Parliament."

This is against the backdrop of Budget 2024 proposing reduced long-term capital gains tax on immovable properties at 12.5% from 20% and removal of indexation benefits to adjust for inflation.

Earlier on July 24, in CNBC-TV18’s Budget verdict, Revenue Secretary Sanjay Malhotra stated that the government expects to generate ₹17,000 crore in revenue from these capital gains tax revisions.

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Finance Secretary TV Somanathan added, "As of now I don't see this being changed in the near future. This is not a transit stop, this is the destination."

He explained that although a 15% LTCG tax rate would have been preferred, setting it at 12.5% was deemed necessary to maintain fairness across different asset classes.

2024-07-26T06:03:32Z dg43tfdfdgfd