Union finance minister Nirmala Sitharaman on Saturday said no timeline has been fixed to end the old tax regime, and that the Centre has only introduced a simpler new tax regime that has the incentive of lower rates.

Announcing the Union Budget 2023-24 proposals, Sitharaman said the new structure will be the default regime, though citizens can continue with the old regime.

In 2020 the government had introduced the new personal income tax regime with six slabs starting at Rs 2.5 lakh. The finance minister has now reduced the number of slabs to five.

Finance ministry officials said the relaxation in the tax regime will not affect the insurance sector.

They added that there was sufficient data to suggest that investments were masquerading as insurance premiums. Therefore, a decision was taken to tax the same.

On the transition toward further fiscal consolidation, finance secretary T.V. Somanathan said the government will focus on broadening revenues, avoiding needless expenditure, and expanding the denominator by achieving higher GDP growth to meet the goals of having the fiscal deficit target of 4.5 per cent by2025-26.

Replying to a query on its decision to convert outstanding dues into equity at Vodafone Idea, Somanathan said the transaction is being done as a package for all telcos.