New Delhi, Feb 1 (IANS): After slashing income tax rates for individuals on condition that they give up exemptions and deductions, Finance Minister Nirmala Sitharaman on Saturday said the government intends to remove all IT exemptions in the long run.

Speaking at a press conference after presenting her second budget, she said income tax cuts follow reduction in corporate tax rates in September last year and in the same manner, with or without exemptions.

"We are looking for simplifying rates and reduced rates. Eventually we want to bring the rates down. So many exemptions are difficult for the administrators... We wanted to achieve two goals -- simplify and reduce income tax. Gradually in the long run, we will be removing all exemptions," she said.

While her budget speech did not provide for any specific number for additional capital, the Finance Minister said improvement in revenue generation gives hopes of lowering fiscal deficit to 3.5 per cent of GDP in the next fiscal from 3.8 per cent in the current.

"Under the new personal income tax regime, individual taxpayers to pay tax at a reduced rate of 10 per cent for income between Rs 5 lakh and 7.5 lakh against the current rate of 20 per cent," Sitharaman said while presenting the Budget.

Some exemptions will continue even for the new tax slabs.

The aim for the current reforms is to make sure that the money reaches the hands of the taxpayer and he is free to use it as he sees fit, she said.