Explaining the rationale behind why Budget 2022 did not cut income taxes, Finance Minister Nirmala Sitharaman on February 2 said that the central government has placed a lot of emphasis on stability and predictability in the income tax regime.
“There are ways in which demand creation can happen. In our country, when you look at taxpayers’ numbers and profile, then you also realise that it is possible to provide stability and predictability in the tax regime. This is a very important factor at a time like this,” Sitharaman told Network18 Editor-in-Chief Rahul Joshi in an exclusive interview.
The finance minister emphasised that she did not want to leave scope for any uncertainty in the tax structure. “You do not want to bring in elements of uncertainty as a result of which some sections could feel they have got some relief, while others would feel it has not come to us,” she said. She reiterated that the Budget has not increased anyone’s tax burden.
Also read: No relief for the salaried, FM keeps tax slabs and rates unchanged
Budget 2022 left income tax slabs under the old as well as new tax regimes unchanged, disappointing individual income-tax payers who were expecting some relief in rates or basic exemption limit.
On digital rupee to be issued by the RBI
Digital Rupee, announced in the Budget speech, is expected to come through “sooner rather than later”. “Once it goes through the Parliament, the Reserve Bank of India (RBI) will move forward to take the cabinet approval and then go forward with issuing the digital currency,” the finance minister said.
Taxing cryptocurrencies does not make them legitimate
She made it clear that bringing cryptocurrencies into the tax net did not automatically provide them with legitimacy. “Since the tabling of the Budget 2022, I am trying to draw a distinction between privately-generated crypto ‘assets’ and what can be a digital currency. Private people creative with digital knowledge using blockchain technology can always create (cryptocurrencies), but that cannot be the currency. The currency would be what the Reserve Bank of India (RBI) or central bank of any country issues. That is why we have put a proposal in the Parliament to say that the RBI would issue digital currency,” she said. However, since transactions in the crypto-space are yielding profit, the government decided to go ahead with taxing them in the meanwhile.
She reiterated that any decision on cryptocurrencies would be taken after consultations. “I am not going to define this… we are holding wide-ranging consultations. Post consultations, we will be coming up with a Bill,” she said. The finance minister, however, stopped short of spelling out whether it would regulate cryptocurrencies. “I do not know what kind of a Bill…it depends on what the consultations yield,” she said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
