Revenue Secretary Tarun Bajaj explains why tax relief to individuals was missing from Budget

Amid criticism over lack of relief for individuals in the Union Budget 2022, Revenue Secretary Tarun Bajaj in an interview to The Economic Times explained the government's stand on the issue.

Finance Minister Nirmala Sitharaman's fourth Budget in a row neither tinkered with tax slabs nor raised the standard deduction, which was widely expected in view of elevated inflation levels and the impact of the pandemic on the middle class.

Bajaj said that there was a huge dilemma about what kind of concession the government could offer, especially with the new exemption-free regime in place.

"If we offer any concession under the old regime, then the whole initiative of an exemption-free regime would be hurt," he said.

Also Read — Haven't raised taxes: FM to questions on Budget not giving relief to middle class

The Revenue Secretary said that the government would do a detailed analysis of the returns received this year. This would be the first year for the new regime. Then, the government would look into how it could bring about parity between the new exemption and the old income tax regime for individuals to encourage more people to move to the new one.

As per 2019-20 returns, 65 per cent of income and 16 per cent of assesses under the coporate tax segment have moved to the new regime.

Sitharaman while answering the questions on her Budget belying expectations of a reduction in the income tax burden on the middle class had said that taxes have not been raised during the pandemic to collect additional funds for the massive spending programme of the government.

"There are times when you can give. There are times when you have to wait... But a lot of things have been done for the middle class," she said, as she narrated the ripple effect the spending on infrastructure, rural and agri economy and housing will have in generating additional income for the middle class.

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