One Nation One Tax: Will One Nation One Income Tax be implemented in the country after GST? Finance Minister Sitharaman gave this answer

0
1616

One Nation One Tax: After the implementation of One Nation One Tax on the indirect tax front, now there is a demand for One Nation One Tax on the direct tax front also.

- Advertisement -

One Nation One Income Tax: To impose indirect tax, GST was implemented in the country from July 1, 2017 on the basis of the principle of One Nation One Tax. Now only one tax GST is collected on goods and services. So is One Nation One Income Tax going to be implemented in the country now?

Actually the echo of this question has been heard in the Parliament. This question was asked by Finance Minister Nirmala Sitharaman in Rajya Sabha. In response to which the Finance Minister did not say anything directly but he told the House that he is ready to discuss this issue.

Confusion among taxpayers

During Question Hour in Rajya Sabha on 6 February 2024, BJD MP Sulta Dev asked that if One Nation One GST is prevalent in the country, then why One Nation One Income Tax is not being implemented? He said that at present both New Income Tax and Old Income Tax regime are in vogue, due to which there is a lot of confusion among the taxpayers.

The complications of a total of 3 to 54 crore taxpayers in the country who pay income tax have increased. He asked the Finance Minister when it would be simplified. It has been three years since the new income tax regime was implemented, so will One Nation One Income Tax be implemented?

Finance Minister ready for discussion

Finance Minister Sitharaman did not give any direct answer to this question. He said, this question is being asked that if One Nation One Tax can be implemented for indirect tax also, then why not for direct tax? The Finance Minister said, this is a very important issue on which I am ready to discuss.

New tax regime came in 2020-21

While presenting the budget on February 1, 2022, the Finance Minister announced the introduction of a new income tax regime which was implemented from the financial year 2020-21. When the new income tax was implemented, there was no benefit of deduction or tax exemption on savings or investments. There was no provision for tax exemption on home loan or mediclaim. Even the benefit of standard deduction of Rs 50,000 was not being given to the taxpayers.

Due to which taxpayers had to pay more tax under the new tax regime. But to make the new regime attractive, while presenting the budget for the financial year 2023-24 on February 1, 2023, the Finance Minister made major changes in the new income tax regime. In the new income tax regime,

taxpayers with income up to Rs 7 lakh do not have to pay tax, whereas in the old tax regime this limit is Rs 5 lakh. The benefit of standard deduction for salaried class and pensioners was included in the new regime. Now the new income tax regime has become the default tax regime.

Doesn’t encourage savings!

In fact, the old tax regime is very complex due to various types of tax exemptions and deductions, which is difficult for the taxpayers to understand and many times they give wrong information, after which they have to make rounds of the Income Tax Department and sometimes get into legal disputes.

also get trapped. Whereas due to the absence of this provision in the new income tax regime, taxpayers cannot give wrong information to get deduction. However, the old tax regime encourages taxpayers to invest and save taxes, which is not the case in the new income tax regime.

Demand has been rising for the first time too

The issue of One National One Income Tax has been raised in Parliament but it is being discussed for a long time. Bibek Debroy, Chairman of the Prime Minister’s Economic Advisory Committee, had recently said that to achieve the goal of tax reforms, it is very important to eliminate all types of tax exemptions in income tax.

He said that tax exemption makes life complicated, increases expenditure on compliance and also increases legal disputes. However, Revenue Secretary Sanjay Malhotra has clarified that the government has no plans to phase out the old income tax regime.

- Advertisement -