Major Announcement by FM Nirmala Sitharaman: New Tax Regime Exempts Individuals Earning Up to THIS Amount Per Year from Income Tax

In a tweet, the Finance Minister stated that "Under the new tax regime, individuals with an annual income up to Rs 7 lakh are exempt from paying income tax. Additionally, with the inclusion of marginal relief provisions, this threshold effectively increases to Rs 7.27 lakh."

Union Finance Minister Nirmala Sitharaman announced that the Modi government has introduced various tax benefits for the middle class. As part of these measures, individuals earning up to Rs 7.27 lakh per year will be exempt from paying income tax. 

She emphasized that the government aims to support every section of society and addressed initial concerns about the income tax exemption for those earning up to Rs 7 lakh in the Union Budget for 2023-24.

The concern raised was regarding the earnings slightly above Rs 7 lakh, clarified Sitharaman. She mentioned that the team thoroughly examined the tax structure to determine the point at which additional income attracts taxation. Currently, no tax is applicable up to Rs 7.27 lakh. The break-even point begins at Rs 27,000, after which income tax is levied on the additional earnings.

Sitharaman further stated that individuals are eligible for a standard deduction of Rs 50,000. This addresses the concern raised under the new scheme, as previously there was no standard deduction. The introduction of the standard deduction aims to simplify the tax payment process and enhance compliance.

In highlighting the government's accomplishments, Sitharaman mentioned a significant increase in the budget for Micro, Small, and Medium Enterprises (MSME). For the fiscal year 2023-24, the budget has reached Rs 22,138 crore, a remarkable rise compared to Rs 3,185 crore allocated in 2013-14. 

This represents a nearly seven-fold increase in budgetary allocation over a span of nine years, showcasing the government's steadfast dedication to empowering the MSME sector.

She further emphasized the success of the 'Public Procurement Policy for Micro and Small Enterprises' scheme, stating that 33% of the total procurement made by 158 Central Public Sector Enterprises has been from MSMEs. This achievement marks the highest-ever percentage of procurement from MSMEs, underscoring the government's efforts to support and promote the sector.

Sitharaman highlighted the initiatives undertaken by the government, stating, 

"We introduced the TReDS platform to prevent liquidity issues for MSMEs and corporations caused by non-payment. The ONDC has expanded the reach of MSME businesses and created a public platform comparable to global giants like Amazon. 

Our efforts to improve the ease of doing business have been recognized globally, with India's ranking in the World Bank's index rising from 142 to 63. 

We have reduced the compliance burden by repealing archaic laws and simplifying regulations. Additionally, I inaugurated the Common Facility Centre at the Indian Institute of Gems and Jewellery in Udupi."

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