The benefit of the revamped I-T regime will percolate down to every section of the taxpayer and the government expects a 'fabulous' response to it, a top Income Tax official said on Friday.
The 2023-24 Budget has proposed changes to the new optional tax regime which provides that no tax would be levied on annual income of up to Rs 7 lakh
The benefit of the revamped I-T regime will percolate down to every section of the taxpayer and the government expects a 'fabulous' response to it, a top Income Tax official said on Friday.
The 2023-24 Budget has proposed changes to the new optional tax regime which provides that no tax would be levied on annual income of up to Rs 7 lakh.
It also allowed taxpayers to claim standard deduction of Rs 50,000—a move seen as a push for the salaried class to switch to the new tax regime where no exemptions on investments are provided.
"The benefit percolates down to every section of taxpayer.... Considering that standard deduction will be available to salaried taxpayers in the new regime, effectively a salaried employee with an income of Rs 7.50 lakh would not be required to pay any tax," Central Board of Direct Taxes (CBDT) Chairman Nitin Gupta said.
In addition to extending the standard deduction, the Budget has also raised the exemption limit and tweaked the tax rates to make the new regime, which was originally introduced in 2020-21, attractive to taxpayers.
Under the revamped new tax regime, no tax would be levied for income up to Rs 3 lakh. Income between Rs 3-6 lakh would be taxed at 5 per cent; Rs 6-9 lakh at 10 per cent, Rs 9-12 lakh at 15 per cent, Rs 12-15 lakh at 20 per cent and income of Rs 15 lakh and above will be taxed at 30 per cent.
The new tax regime will be more beneficial for a person who does not have enough investments to claim I-T deductions.
"We have tried to sweeten the scheme as much as possible because it is hassle free, it does not require taxpayer to include any documentation as well as it is easier for the tax administration to administer the scheme," Gupta said.
He said the lower corporate regime with no exemption, which was introduced in 2019, was received well by businesses.
"We expect that the response to the proposed new (personal income tax) scheme would be fabulous," Gupta said at an event organised by Assocham.