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New slab of income tax: 80% can change tax regimes: Government | India Business News

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NEW DELHI: The Center expects that up to 80% of the tax assessors will be transferred to the new flat rate regime since the data analyzed showed that a large number of evaluators did not use the benefit of the housing rental allowance (HRA) or the deductions allowed for investments. Of the nearly 5.8 million crore assessed that submitted statements for the last fiscal year, 55.4 lakh had claimed HRA, which is approximately 9.5% of the base. Within this, about 43 lakh had an annual HRA of less than Rs 1 lakh. Around 42,000 evaluators had said their annual HRA was more than Rs 4 lakh, or more than Rs 33,500 per month.
Under the new regime proposed in the Budget, allocations such as HRA and LTA will be added to income and taxed. Currently, these assignments are not counted when calculating the taxable income. People can also claim a deduction for mortgage loans if they live on the property.

New slab of income tax: 80% can change tax regimes: Government | India Business News

the government has maintained the new tax regime, which offers lower rates due to reworked slabs, but without exemptions,

It will benefit a large part of the taxpayers.

It has been said that taxpayers must calculate and decide if they want to move to the new system or stick to the existing one.
On Sunday, the government also said that about 9% of taxpayers or 48 lakhs made use of the deduction of Rs 2 lakh for investments in pension funds, life insurance or medical insurance. There were about 3.8 lakh people who had claimed exemptions of more than Rs 4 lakh.

Tax department officials said the government expected up to 80% of tax assessments to change to the new regime, after making the calculations, as it simplified life in addition to the lower rates. Authorities said that even those who need to pay a marginally higher amount may be attracted by the lack of problems in the flat rate.
The government expects to receive a blow of around Rs 40,000 crore based on this assumption. Officials have argued that a large number of taxpayers are not in a position to take advantage of all exemptions at low income levels. It was only the upper middle class and the rich who claimed the exemptions and that this segment will have the option of sticking to the current regime.



Times of India

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