New Delhi [India], August 8 (ANI): Pulling a thread from where Finance Minister Nirmala Sitharaman left yesterday during her discussion on Finance Bill 2024-25 in the Lok Sabha, she said on Thursday fitment committee that looks after GST related proposals have members from all states, including from the Opposition ruled states. Speaking in Rajya Sabha today, she particularly took names of Tamil Nadu, West Bengal, and Karnataka.
To the Opposition members who raised various concerns, including seeking exemption of GST on medical insurance premiums, the finance minister suggested that they should take it up with their recommendations with their respective state’s finance minister, so they can subsequently bring it up in the GST Council meeting for deliberation.
Speaking on the suggestions by many Opposition members to reduce GST on health insurance premiums, Sitharaman reiterated today that taxes were imposed on such items even before the GST regime came into effect in 2017.
States form two-thirds of the GST Council, which is a constitutional body, she said.
Both life insurance and medical insurance premiums attract a GST rate of 18 per cent. Recently, many leaders from Opposition ruled states have requested Finance Minister Sitharaman to reduce GST on insurance premiums. West Bengal Chief Minister Mamata Banerjee has requested the central government to withdraw the Goods and Services Tax (GST) on life insurance and health insurance premiums, terming the taxation on such items as “anti-people.”
She also informed the Rajya Sabha today that the matter (GST on insurance premiums) was discussed in the 31st and 37th and 47th meetings of the GST Council.
Further, citing a newspaper report, which headlined central government pocketed Rs 24,529 crores on health insurance premium, she rubbished it and explained how those taxes were shared with states.
If GST is 18 per cent on some item, here it is health insurance premium, 9 per cent goes to the state and the rest 9 per cent comes to the central government.
Of the central government’s portion, another 41 per cent goes to the states. So, in total, approximately 73-74 per cent the GST collected on health insurance premium goes to the states. Against that context, she again asked the members to write to their respective state’s finance minister so that they could take it up in the GST Council meeting.
The INDIA alliance leaders held a protest against the Central government outside the Parliament on Tuesday, demanding to roll back GST on health and life insurance products. Congress leader Rahul Gandhi also joined the protest. Besides, some of the members also raised this matter during the ongoing Parliament session.
Today, in her address in Rajya Sabha, she outlined how her government provided relief to middle class on the tax front and how capex spending has had a multiplier effect on the economy, making the country the fastest-growing emerging economy.
“Since COVID, with this emphasis given on capex whose multiplier effect and traction is so much in the economy, which is an established theory. You spend on capital and you reap the benefit of sustained growth. Whereas if you spend on revenue, where you don’t get that kind of return or the multiplier effect. That multiplier effect has sustained in India as a fastest growing economy continuously since after Covid. We shall be fastest growing even this year. That’s not just me saying, global observers have said,” she explained the benefit of capex spending.
Further, Sitharaman said that the government has taken several steps to provide relief to the middle class. Replying to the opposition members who repeatedly accused the government of burdening taxpayers both through direct and indirect taxes, she said that government has raised standard deduction for salaried employees, increased the limit of exemption of capital gains on certain listed financial assets and abolished angel tax.
For the benefit of the lower and middle-income classes, Sitharaman in her Budget speech on July 23 proposed to increase the limit of exemption of capital gains on certain listed financial assets from Rs 1 lakh to Rs 1.25 lakh per year.
Coming to personal income tax rates, she had two announcements will help those opting filing returns under new tax regime.
First, the standard deduction for salaried employees is proposed to be increased from Rs 50,000 to Rs 75,000. As a result of these changes, a salaried employee in the new tax regime stands to save up to Rs 17,500 in income tax. Similarly, deduction on family pension for pensioners is proposed to be enhanced from Rs 15,000 to Rs 25,000.
The Lok Sabha took up discussion on the Finance Bill after the Appropriation Bill for the central government’s expenditure for 2024-25 was passed by the House on Monday.
Today, the Finance Bill 2024, the Appropriation Bill 2024, and the Jammu and Kashmir Appropriation Bill 2024 were returned by Rajya Sabha to Lok Sabha.
The passage of the Finance Bill by Parliament completed the budget process.
The Finance Minister has proposed an amendment in the Finance Bill to give big relief on capital gains tax in property transactions.
The proposed amendment implies that taxpayers on property transactions can avail either a lower tax of 12.5 per cent without indexation or a higher rate of 20 per cent with indexation, if the property is acquired before July 23, 2024, the day the union budget was presented in the Lok Sabha. July 23, 2024, is now set as the cut-off date for the calculation of the capital gains versus the earlier cut-off of 2001 that had caused a lot of concern and triggered a debate over its impact on long-time owners of property assets.
To bolster the Indian start-up eco-system, boost the entrepreneurial spirit, and support innovation, Finance Minister Nirmala Sitharaman in her Budget speech proposed to abolish the so-called angel tax for all classes of investors.
This was a proposal from the industry for a long time, and this announcement is expected to drive more investments toward startups in particular. Startups function as engines of economic growth, playing a crucial role in generating new jobs, ideas, products, and services. As per definition, angel tax refers to the income tax levied by the government on funding raised by unlisted companies, or startups, if their valuation exceeds the company’s fair market value.
Sitharaman presented the Union Budget 2024 in Parliament on July 23, marking her seventh consecutive budget and eclipsing the late Moraji Desai’s record of six consecutive budgets.
The interim budget, tabled on February 1, took care of the financial needs of the intervening period until a government was formed after the Lok Sabha polls.
The budget session of Parliament began on July 22 and, according to schedule, will end on August 12. (ANI)
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