Finance Minister Arun Jaitley on Thursday defended his Budget over criticism that it had not done enough for the middle class.
“In all my Budgets together, I have tried to put more money in the hands of the middle class,” he said at his customary post-Budget press conference.
The Minister said the Budget has given relief to salaried taxpayers, senior citizens and businesses.
“We have recognised the contribution of 2.5 crore people and have re-introduced a standard deduction of ₹40,000 for all of them,” he told reporters.
With increasing longevity, senior citizens have become an important part of the middle class, the Minister said.
The Budget has proposed a slew of measures to protect senior citizens from the falling interest rates, including higher exemptions on income from interest on bank and post office deposits, health insurance premium and critical illness expense.
The Finance Minister also said the proposal to lower the corporate tax to 25 per cent for companies with an annual turnover of up to ₹250 crore will also help the middle class.
“I have not forgotten businesses either. They are a strong part of the middle class,” he said, adding the lower tax rate will also give them more investible surplus.
Commenting on the main priorities of his Budget, the Minister said that “it blends fiscal prudence with the requirements and the needs of the economy today”.
Support for sectors
Jaitley said that the main focus of spending in the Budget was sectors that required maximum support such as agriculture and rural areas and economically weaker sections.
While he has tried to maintain the fiscal deficit in previous years, he said that 2017-18 was proving to be an unusual year with different circumstances, which led to relaxation of the fiscal deficit targets.
In this regard, the additional resources raised from the long-term capital gains tax would be used to maintain the fiscal prudence and meet expenditure.
“Any gain in capital from February 1 is taxable. The rate is however, lower than the short term capital gains tax,” he said.
The Budget has proposed a 10 per cent long-term capital gains tax on all such gains from February 1, 2018.