ITR filing: Nearly 5.25 crore taxpayers choose new income tax regime, says FM Sitharaman

As many as 5.25 crore income taxpayers in India have chosen the new tax regime offered by the Government of India, PTI reported on Wednesday, August 7, quoting Finance Minister Nirmala Sitharaman. This makes up for 72.8 per cent of the people who pay tax.

The Lok Sabha passed the Finance Bill 2024-25, as the finance minister highlighted that the government was aiming to simplify tax laws to enable growth and employment, as per an ANI report.

“So, simplification and ease of compliance for the taxpayer has been the primary objective with which in the last 10 years, and this year, in the third term of PM Modi, the approach to taxation has been to simplify it, reduce the burden on taxpayers and make sure it is transparent and equitable,” said Sitharaman, as per the report.

“This year also, our approach has been that we bring in greater simplification of tax laws and procedures, and that we enable growth and employment in this country,” she said, as per the report.

On July 23, 2024, Nirmala Sitharaman presented the Union Budget for the year, the first budget of Prime Minister Narendra Modi-headed NDA alliance government in the third term. The Lok Sabha started discussions on the Finance Bill after the Appropriation Bill for the central government expenditure for the financial year 2024-25 was passed on Monday.

The July Union Budget 2024 revised the tax slabs under the new tax regime as the government considered simplifying the tax laws.

The finance minister also responded to the opposition members who alleged that the government is burdening the taxpayers on both the direct and indirect tax front.

"Standard deduction for salaried employees has also been increased from ₹50,000 to ₹75,000 in the new regime in this budget. This is an effective relief up to ₹17,500 for a salaried employee," said Sitharaman, as per the report.

"In 2023, the slabs for personal income tax were significantly liberalised. All taxpayers had reduced tax liability of ₹37500. This govt has again revised slabs in the new regime," she said.

The government aims to benefit the middle class through these changes in the new tax policy. The Budget also increased the limit of exemption of capital gains on certain listed financial assets from ₹1 lakh to ₹1.25 lakh per year

The target of the fiscal deficit is at 4.9 per cent of the gross domestic product (GDP), as per the Budget 2024 announcement. The government intends to bring it below the 4.5 per cent level by the financial year 2025-26. At the same time the Budget 2024 has kept the capital expenditure outlay at ₹11.11 lakh crore for 2024-25.