New Delhi: With middle and salaried class complaining of being left high and dry by the Union Budget, finance minister Arun Jaitley said on Friday that tax slabs in India are already the lowest in the world for small tax payers.
Mr Jaitley said that he has consistently given relief to small taxpayers in all his Budgets and will provide relief in the future depending on fiscal space.
“Last year, for up to Rs 5 lakh I reduced the slab from 10 per cent to 5 per cent. The 5 per cent tax slab exists only in one country in the world, and that is India. It is the lowest tax slab in the world. Where you have a 5 per cent tax slab in direct tax and one per cent slab in indirect tax, the question is how much less can you make it? Do I reduce the size of the Army because I can’t maintain it? Should we not set up hospitals and healthcare? You can’t get tax slabs lower than this anywhere in the world,” said the finance minister.
Citing various major announcements the past, he said, when the government came in, the exemption limit was raised from Rs 2 lakh, additional exemption of Rs 50,000 on saving so Rs 1 lakh became Rs 1.5 lakh and another exemption Rs 50,000 for housing loan repayments raising it to Rs 2 lakh per year.
Pointing out that revenue is required for building infrastructure, he said, “Today, to reduce the tax base by saying the number of tax payers are being reduced, you don’t serve the larger national interest.” The government can serve national interest by ensuring that people come within the tax net but the smaller taxpayers are given concessions in various ways so that they pay less, he said.
“India, Mr Jaitley said, “has a serious challenge in term of increasing the tax base and, therefore, if you analyse the sum total of my last four-five Budgets, systematically to the smaller taxpayer I have given relief almost in every Budget.”
Finance minister said he was committed to the consolidation of banks and privatisation of IDBI Bank by reducing government’s stake to below 50 per cent as promised in the past Budget.
On crude oil prices having an impact on fiscal maths, the finance minister said rising prices is a matter of concern but added that they are still within the comfort level. “I think India has got out of high inflation era and the inflation target of 4 per cent plus minus 2 per cent is a reasonable figure and it is achievable,” he said.
