Interim Budget 2024: Will new personal tax regime be made more better?
business Jan 30 2024
Author: Team Asianet Newsable Image Credits:freepik
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1. New personal tax regime:
The government's initiative in Budget 2020 aimed to streamline the tax structure and ease complexities, introducing the optional New Personal Tax Regime.
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2. Removal of several deductions and exemptions:
About 70 deductions and exemptions were eliminated from the Income Tax Act, with a focus on reviewing and rationalizing the remaining provisions under the New Personal Tax Regime.
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3. Lower tax rates across six income levels:
The New Personal Tax Regime offered reduced tax rates spread across six income levels, contrasting with the previous four-level structure.
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4. Mixed reactions to the new regime:
The initial response to the New Personal Tax Regime was mixed, as it excluded tax benefits associated with common deductions and exemptions, raising concerns among taxpayers.
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5. Challenges in choosing the correct regime:
The introduction of the new regime created ambiguity for taxpayers in choosing between the old and new regimes, prompting a careful evaluation based on individual circumstances.
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6. Retained tax benefits and allowances:
The New Personal Tax Regime retained benefits like employer contributions to the National Pension System (NPS) and specific allowances under section 10(14).
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7. Centre's response:
The government introduced an online tax comparative calculator, allowing individuals to assess their situations and determine the most beneficial tax regime.