Mint via Getty Images Union Finance Minister Nirmala Sitharaman addresses a press conference after presenting the Union Budget 2020-21.

If Budget 2020 left you confused about whether you’re better off or worse, take heart. You’re not alone. If the clarifications since Saturday are anything to go by, even the finance ministry seems to be scratching its head over several announcements made by Nirmala Sitharaman in India’s longest ever budget speech. A day after the budget, Sitharaman said in an interview to Deccan Herald’s Annapurna Singh that her ministry will issue clarifications on the new personal tax regime. Advertisement For most salaried employees, direct taxes are the most important part of the budget. Two of the biggest talking points of Sitharaman’s budget were a proposed new tax structure for income tax and the announcement that NRIs who don’t pay taxes in other countries would be taxed in India. Even as people remained confused by what the new tax regime means, Mint explained that most tax payers won’t benefit from shifting.The report said that calculation of tax payable under the new and old tax rates for two income levels — ₹10 lakh and ₹65 lakh — shows that people will pay more taxes under the new regime. Advertisement

This, the report said, was because to avail the new tax rates, taxpayers will have to give up standard deductions such as the ₹1.5 lakh deduction under the Section 80C basket. This confusion, Sitharaman said in the interview with Singh, may be because of the finance ministry. Deccan Herald quoted her as saying, “There is definitely a lack of clarity. That is why we have started issuing clarifications... The ministry is doing the calculations. Once the due explanations are offered, it will be for everyone to see that the new tax regime is better off because the tax cuts are deeper. And, also we have not taken away all exemptions. There are certain exemptions, which are allowed even in the new system.” Advertisement She said the idea behind the new tax regime was to move to a system where rates are “significantly lower”, so that more people who complied with it. Taxing NRIs? The clarifications were not just restricted to the new tax regime, they were also related to the announcement on taxing NRI income. After this created an uproar—Kerala CM Pinarayi Vijayan wrote to PM Narendra Modi expressing concerns about this and another amendment related to the classification of NRIs—the finance ministry issued a clarification on Sunday that “those Indian citizens who are bonafide workers in other countries” will not be included in this tax net. Advertisement Sitharaman also said in a post-budget interaction with the media that the government had no intention of taxing the global income of NRIs. “If you have a property here and you have a rent out of it, but because you are living there, you carry this rent into your income there and pay no tax there, pay no tax here ... since the property is in India, I have got a sovereign right to tax,” she said. “I am not taxing what you’re earning in Dubai but that property which is giving you a rent here, you may be an NRI, you may be living there but that is revenue being generated here for you. So that’s the issue,” she added. Advertisement