News

Published: May 08, 2024
Updated: May 08, 2024

FM Sitharaman Denies Speculations on Income Tax Changes Post-Election

Dispelling Rumours

Finance Minister Nirmala Sitharaman has dismissed media reports suggesting significant changes to the income tax system following the Lok Sabha election results. She refuted the claims on social media, emphasizing that they were purely speculative and not verified with the Finance Ministry.

Speculated Changes in Tax Structure

Reports had hinted at potential alterations in tax slabs and strategies to curb tax base erosion under the new government. Additionally, uniform capital gains across all asset classes were proposed. Currently, there exists a varied tax structure for different financial assets.

Market Response and Volatility

The market responded to these reports with significant volatility, as evidenced by a sharp decline in the Sensex and a rise in India VIX, indicating market nervousness. The overall market capitalization of BSE-listed firms decreased, resulting in a substantial loss for investors.

Looking Ahead

The upcoming government, to be in power post-June 4, is expected to conduct the main budget session in July 2024. While the Interim Budget 2024 refrained from tax rate revisions, Finance Minister Sitharaman stated that the timing was not conducive for such decisions.

Finance Minister Sitharaman's clarification brings clarity amidst market uncertainty. As investors await the new government's policy direction, the Finance Ministry's stance underscores the importance of accurate information dissemination to prevent unwarranted market fluctuations.