Middle-class upset with tax snub in Budget 2024: Nirmala Sitharaman responds

Facing criticism over the tax snub to India's middle class in her Budget, Finance Minister Nirmala Sitharaman addressed the concerns head-on at Business Today's Budget 2024 roundtable on Saturday. 

Her response was clear: the government's approach aims at simplification and rationalization, not just for the middle class but for all taxpayers.

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When questioned about the middle class's involvement in futures and options, Sitharaman firmly stated, "Futures and options are indeed for the middle class. Please don't mind me saying, why can't the middle class be there? Of course, they can be. However, futures and options come with risks. We haven't imposed any undue increase. For options, it's a minimal change, and for futures, the tax has only slightly doubled from 0.0125 to 0.02."

Addressing the fear of black money resurfacing in real estate post the removal of indexation, Sitharaman remarked, "Haven't we, as a country, kept saying why all this differentiation between different asset classes? Why can't it be simple? Why don't you rationalize it? That's been a very strong argument. In gold, the treatment is one way; in property, it's another; in stocks, it's different again. The rates vary too. People have told me about TCS and TDS. For the middle class, I said if there is TCS, you can carry it forward as a credit into your TDS. All inputs from the middle class over the years have been considered. When I ask if we should treat all asset classes equally, that's exactly what we've done."

On potential future tax changes, Sitharaman emphasized the importance of stability and simplicity. "I've announced in the budget that over the next six months, a committee will look into simplifying direct taxation. If I'm doing one thing now, the rest will be addressed by this committee. So, in the name of stability, should we never change it even if it is complex? It can't be that way. There has to be a balance. When GST was brought in, different states had different rates. All officers sat together to find a common ground. Similarly, the thumb rule now is we don't want additional complexity."