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Business News/ News / India/  New income tax regime for filing returns 'sweetened': CBDT chairman
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New income tax regime for filing returns 'sweetened': CBDT chairman

Finance Minister Nirmala Sitharaman during a Budget speech in Parliament said the government has made the new income tax regime more attractive for taxpayers

As per the Budget 2023 announcement, no tax would be levied on people with an annual income of up to ₹7 lakh under the new tax regime (HT_PRINT)Premium
As per the Budget 2023 announcement, no tax would be levied on people with an annual income of up to 7 lakh under the new tax regime (HT_PRINT)

With the announcement of the Union Budget 2023, the CBDT Chairman Nitin Gupta said the new income tax regime for filing returns has been 'sweetened'.

Gupta said the intent of the government while announcing the new slabs and rates under the new tax regime is to gradually "do away with deductions and exemptions" so that the "long-standing demand of reduction of taxes for individual taxpayers and entities can be met".

Yesterday, Finance Minister Nirmala Sitharaman during a Budget speech in Parliament said the government has made the new income tax regime more attractive for taxpayers and has thus brought about 'substantial changes' in its structure for the benefit of the middle class.

The CBDT Chairman said the new tax regime for individuals was laid down two years ago, but "the benefits were not percolating and now the government has tweaked the retweaked the tax slabs and benefit is now clearly visible".

"The new regime is really sweetened...the section of taxpayers who will not be benefitting will be a very minuscule section which is taking all sorts of benefits in terms of the interest in the house property, the deductions under section VIA among others and only those type of taxpayers could be impacted in terms of they would be better off in the old regime".

The CBDT Chairman said that there are about 3.5 crore salaried taxpayers in India and every salaried taxpayer will be at par with the old regime if they opt for the new regime because the standard deduction has been made available in the new regime...so in terms of parity it has been established."

"With the reduced number of slabs and wider slabs, the benefit will be percolating to everyone now and the long-standing demand for reduction of taxes will be met," he said.

PTI news agency asked the CBDT Chairman whether the new tax regime will be a "default" tax option, he said the taxpayers will have full independence to choose any one of the tax filing systems and none of them will be at any loss including the facility to reverting to the old scheme.

"The new regime is the default scheme in the sense that what will come up on the screen (on the e-filing portal) will be the new regime but the option is intact and the taxpayer can shift between the regimes..."

"There is no disincentive for any section of taxpayers and they can opt for the regime which they want to," he said.

Gupta said an 'online calculator' will also be provided to the taxpayers, like before over the e-filing portal, to compare their tax liabilities under the two regimes.

As per the Budget 2023 announcement, no tax would be levied on people with an annual income of up to 7 lakh under the new tax regime but it made no changes for those who continue in the old regime that provides for tax exemptions and deductions on investments and expenses such as HRA.

Under the revamped new tax regime, no tax would be levied for income up to 3 lakh. Income between 3-6 lakh would be taxed at 5%; 6-9 lakh at 10%, 9-12 lakh at 15%, 12-15 lakh at 20%, and income of 15 lakh and above will be taxed at 30%.

An individual with an annual income of Rs 9 lakh will be required to pay only Rs 45,000. This is only 5% of his or her income. It is a reduction of 25% on what he or she is required to pay now (in the old regime) -- Rs 60,000, she said.

"Similarly, an individual with an income of Rs 15 lakh would be required to pay only Rs 1.5 lakh or 10% of his or her income, a reduction of 20% from the existing liability of Rs 1,87,500," Sitharaman said.

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Published: 02 Feb 2023, 01:47 PM IST
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