Government can change the rules to popularize the new income tax system among taxpayers

New Income Tax Regime: In order to increase the acceptability of the new tax regime among taxpayers, the government is considering making major changes in its rules. Tarun Bajaj, who is going to retire from the post of Revenue Secretary in the Ministry of Finance, has indicated this. It is believed that in the new income tax regime, some tax exemption can be given with conditions. So that taxpayers can choose this option.

Taxpayers’ indifference to the new tax regime
Tarun Bajaj said that in the new income tax regime, those earning up to Rs 2.5 lakh do not have to pay any tax, but those earning up to Rs 7.5 lakh in the old tax regime are saved from paying tax. Most people fall in this category and hence there is no incentive to opt for the new income tax regime. Tax rates may be lower in the new system of income tax, but the new system is not appealing to taxpayers due to not getting the benefit of standard deduction apart from tax exemption on home loan principal or interest or savings. In the assessment year 2021-22, less than 5 percent of taxpayers filed income tax returns under the new income tax system. In such a situation, the government is considering making the new system attractive. According to the new tax slab system, if any taxpayer does not want to take advantage of tax exemption or deduction, he can choose this new tax slab system option.

tax rebate on investment
In the old regime of income tax slabs, taxpayers can take advantage of many types of tax exemptions. Under Section 80C of Income Tax, you can take advantage of tax exemption on home loan principal along with Insurance ELSS, Provident Fund, PPF and children’s tuition fees. There is also a provision of tax exemption on home loan interest up to Rs 2 lakh. Standard Deduction of Rs 50,000 is also available, which is not available in the new tax regime.

Changes in capital gains tax rules!
According to Tarun Bajaj, changes have also been indicated in the rules of long term capital gains tax. It is believed that Finance Minister Nirmala Sitharaman can make a big announcement in this budget regarding the change in the rules of long term capital gain tax. Equity investors are liable to long term capital gains tax on capital gains after the holding period of 12 months. Short term capital gains tax is applicable on capital gains held for less than one year. If the property is sold or unlisted shares are sold, long term capital gains tax is levied after 2 years. For jewelery and debt financial instruments, the 20% long-term capital gains tax rule applies after 3 years. In the budget, emphasis can be laid on rationalizing long-term capital gains tax, as well as a change in the base year is also possible to give the benefit of indexation.

News Reels

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *