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July 25, 2024

Netizens Remember Dr. Manmohan Singh Following the Release of the New Union Budget

Following the introduction of the new Union Budget by Finance Minister Nirmala Sitharaman on Tuesday, social media has been abuzz with nostalgic references to Dr. Manmohan Singh. Widely regarded as one of India’s greatest economists, Singh’s legacy as the former Prime Minister and Finance Minister is being fondly remembered as citizens react to the latest financial announcements.

The budget for the fiscal year 2024-25, presented this week in Parliament, has elicited mixed reactions across various segments of society. While some praise the reforms, others voice their criticisms. Central to the new budget are significant changes to the tax regime, which aim to streamline and simplify the tax structure.

Revised Income Tax Slabs

The new income tax regime introduces the following tax slabs:

Up to Rs 3 lakh: NIL tax
Rs 3 lakh to Rs 7 lakh: 5% tax
Rs 7 lakh to Rs 10 lakh: 10% tax
Rs 10 lakh to Rs 12 lakh: 15% tax
Rs 12 lakh to Rs 15 lakh: 20% tax
Above Rs 15 lakh: 30% tax

Notably, the standard deduction has been increased from Rs 50,000 to Rs 75,000, and the 5% tax rate now applies to income up to Rs 7 lakh, up from the previous Rs 5 lakh threshold. Additionally, the capital gains tax regime has undergone a comprehensive overhaul, with increased tax rates. No changes have been made to the old income tax regime, as the government aims to incentivize taxpayers to adopt the new system.

To enhance social security benefits, the deduction for employer contributions towards the National Pension System (NPS) is proposed to increase from 10% to 14% of an employee’s salary. This adjustment will also apply to employees in the private sector, public sector banks, and undertakings opting for the new tax regime.

Simplified Tax Regime Appreciated

Finance Minister Sitharaman highlighted the appreciation for the simplified tax regimes, both corporate and personal, which offer no exemptions and deductions. In the financial year 2022-23, 58% of corporate tax was collected through the simplified regime. Data from the last fiscal year shows that more than two-thirds of individual taxpayers have opted for the new personal income tax regime.

The proposed changes are expected to result in a revenue loss of approximately Rs 37,000 crore—comprising Rs 29,000 crore in direct taxes and Rs 8,000 crore in indirect taxes. However, the government anticipates mobilizing an additional Rs 30,000 crore, leading to a net revenue forgone of about Rs 7,000 crore annually.

Comparisons to Manmohan Singh’s Tenure

The shift in focus towards the new tax regime has prompted many to recall Dr. Manmohan Singh’s influential tenure. Singh, who played a pivotal role in liberalizing the Indian economy in the early 1990s, is often credited with laying the foundation for modern economic policies in India. His pragmatic approach and profound understanding of economic intricacies have left a lasting impact, making him a revered figure in the nation’s financial history.

As the new budget would continue to spark discussions and debates, the echoes of Singh’s economic philosophies resonate with many, reminding them of a transformative era in India’s economic landscape.

News Desk

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