Open to feedback on tax changes but... read FinMin latest remark on Budget

Union Finance Minister Nirmala Sitharaman's recent remark follows feedback from several experts and salaried individuals who feel that the Budget did not provide sufficient relief to the middle class

Union Finance Minister Nirmala Sitharaman has said that she is open to suggestions regarding tax changes. Her statement comes days after she presented the Union Budget for 2024-25, in which she revised the slabs under the new tax regime while also raising the standard deduction limit from Rs 50,000 to Rs 75,000.

Her remark follows feedback from several experts and salaried individuals who feel that the Budget did not provide sufficient relief to the middle class. Opposition parties have also criticised the government for removing the indexation benefit on the sale of real estate assets.

During an event on Friday (26 July), Sitharaman was asked about investors’ concerns regarding the withdrawal of the indexation benefit. She responded, “I will hear all comments and suggestions with respect to tax changes, but the Finance Bill now rests with Parliament. I can’t comment on it outside.”
 

Previously, she had mentioned that taxes were increased for the government to pocket more money. “The decision is based on the idea that every asset class has to be treated similarly... The decision has been taken based on envelope calculation,” she told CNBC-TV18 during a panel discussion.

Budget 2024: Changes in the LTCG Rate

Tabling the Budget on July 23, Nirmala Sitharaman announced that the government has proposed to reduce the long-term capital gains tax (LTCG) rate on real estate assets to 12.5 per cent from the earlier 20 per cent, and to eliminate the indexation benefit to adjust for inflation. Indexation is a mechanism to adjust the purchase price of an investment, such as a house, to reflect the effect of inflation on such assets.

In her Budget speech, the Finance Minister added that the new rates would be applicable immediately, but properties bought before 2001 would be protected against the latest changes. She has also proposed to increase the LTCG tax rate to 12.5 per cent from the earlier 10 per cent, drawing strong reactions from stock market investors.