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Business News/ News / India/  Govt wants to move to simple, exemption free tax regime: Revenue Secretary
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Govt wants to move to simple, exemption free tax regime: Revenue Secretary

Introduced in 2020-21, the new tax regime is being pushed by the government with a tweak in rate structures and more exemptions

Revenue Secretary Sanjay Malhotra on Thursday said that the government is eventually planning to move to simple tax regime (PTI)Premium
Revenue Secretary Sanjay Malhotra on Thursday said that the government is eventually planning to move to simple tax regime (PTI)

A day after Union Finance Minister Nirmala Sitharaman presented the Union Budget 2023 and announced attractive tax proposals under the new tax regime, Revenue Secretary Sanjay Malhotra on Thursday said that the government is eventually planning to move to a simple, exemption-free tax structure, which also has lower rates.

In her speech for Budget 2023, Sitharaman announced a reduction in tax slabs from six to five, under the new tax regime. The taxpayers also have the flexibility to invest, according to their financial goals, rather than being stuck in the complex maze of investing and then filing exemptions under the old tax regime.

The new tax regime also provides that no income tax would be levied on people with an income up to 7 lakh (previously the limit was 5 lakh). The new structure also allows taxpayers to claim the standard deduction of 50,000.

The Revenue Department informed in an analysis that a person earning 15 lakh and paying tax under the old tax regime must claim deductions of at least 3.75 lakh or else revamped tax rate under the new tax regime is more beneficial.

The government has no specific timeline in mind to make the new regime mandatory, Malhotra said in an interview with the news agency PTI. "We would like to move towards a lower tax rate, which is simple and without tax exemptions," he added.

Taking the standard deduction into account, all those earning up to 7.5 lakh will not have to pay any tax under the new regime. Earlier, the standard deduction was available to people under the old tax regime.

Introduced in 2020-21, the new tax regime is being pushed by the government with a tweak in rate structures and more exemptions. The taxpayers in the old tax regime did not receive any special relief in the budget and the government also announced that now the new tax regime will be the default option. It means while filing Income Tax Returns (ITR) taxpayers will have to opt for the old tax regime.

(With inputs from PTI)

 

 

 

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Published: 02 Feb 2023, 10:10 PM IST
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