Mint Explainer: Key policy changes in Nirmala Sitharaman’s first stint as FM

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Mint takes a look at some of the key policy changes brought in by Nirmala Sitharaman, an influential voice in the new cabinet, during her first five years as FM. Sitharaman is tipped to retain the finance portfolio in the new government. The union budget for FY24 raised the tax-rebate ceiling under the new personal income tax regime from ₹5 lakh to ₹7 lakh, easing the burden on the middle class.

Earlier, the ceiling was ₹5 lakh in both the old and new regimes. Including the ₹50,000 standard deduction, which was also introduced in the same budget, those earning up to ₹7.5 lakh do not have to pay any income tax under the new regime. The new personal income tax regime is now the default option for all, but you can still choose the old regime.

Also read: India needs greater sophistication in manufacturing, says FM Nirmala Sitharaman Under the new regime, the number of income slabs was reduced from six to five, and the tax-exemption limit was raised from ₹2.5 lakh to ₹3 lakh. The surcharge on income tax was also rationalised in the new tax regime in the FY24 budget. With a revamped portal for filing tax returns, the Income Tax department can process returns filed for assessment year 2023-24 (AY23-24) in about 10 days, compared to 82 days for AY19-20 and 16 days for AY22-23, the Central Board of Direct Taxes (CBDT) said last September.

Also, taxpayers can now update their returns if they missed anything in previous filings. The formalisation of the economy and leveraging technology in taxation helped the government make tax administration more efficient and increase the resources available to the exchequer. The combined monthly GST collection of the union government and states in April was a record at ₹2.1 lakh crore, marking