Tax Nirmala Sitharaman
Finance Minister Nirmala Sitharaman has recently introduced several tax-related measures that have garnered significant attention:-
Income Tax Reforms:
- Personal Income Tax Cuts: In the 2024-25 Budget, the government reduced income tax rates to boost consumption. The revised tax structure includes a 5% tax rate on annual income between ₹3 lakh and ₹7 lakh, expanding the previous limit from ₹6 lakh. Additionally, the standard deduction for salaried employees has increased to ₹75,000. Corporate Tax Adjustments: The government increased taxes on equity derivatives trades and capital gains from equity investments. The tax on stocks held for less than one year was raised to 20% from 15%, while the tax on stocks held for more than one year increased to 12.5% from 10%. These measures aim to encourage long-term investments.
- Goods and Services Tax (GST) Updates:
- Popcorn Taxation: The GST Council, chaired by Sitharaman, introduced differentiated GST rates for popcorn: 5% for non-branded salted popcorn, 12% for pre-packaged and branded popcorn, and 18% for caramel popcorn due to its added sugar content. This decision has sparked public debate over the complexity of the tax system. Reuters
- International Trade and Taxation:
- EU Carbon Tax Critique: Sitharaman criticized the European Union’s Carbon Border Adjustment Mechanism (CBAM), labeling it an arbitrary “trade barrier” that adversely affects developing economies like India. The CBAM aims to penalize carbon emissions embedded in goods imported into the EU, potentially impacting India’s industrial sectors.
- Property Tax Revisions:
- Capital Gains Tax on Real Estate: Following public backlash, the government revised new property tax rules. Taxpayers can now choose between a 12.5% rate without inflation adjustment or the previous 20% rate with it, offering flexibility and relief, especially for those selling older properties. These developments reflect the government’s ongoing efforts to balance economic growth, fiscal responsibility, and public welfare through nuanced tax policies.
- For a more in-depth understanding, you might find the following video insightful:
