Central Board of Direct Taxes (CBDT) chairman Nitin Gupta has said that he expects at least 50-66 per cent (two-thirds) of the taxpayers to switch over to the new tax regime in the next financial year itself.
"We have left it to the tax payers as to how many people will shift to the new tax regime. We have left it up to the tax payers which tax regime they want to live in, but we think that at least 50 per cent to 65-66 per cent (two-thirds) taxpayers are likely to switch over to the new tax regime in the first year itself," Gupta told ANI in an exclusive interview.
The CBDT Chairman, citing the Budget announcement, said the income tax rebate limit available for salaried and individual taxpayers under the new income tax regime, introduced in 2020, has been hiked to ₹7 lakh from the present ₹5 lakh.
Also, the government has announced five slabs in the new income tax regime.
On personal income tax, the government announced that tax for income of ₹0- ₹3 lakh is nil, for income above ₹3 lakh and up to ₹5 lakh will be taxed at 5 per cent, for income of above ₹6 lakh and up to ₹9 lakh will be taxed at 10 per cent and for income above ₹12 lakh and up to ₹15 lakh to be taxed at 20 per cent and above 15 lakh at ₹30 per cent.
{{/usCountry}}On personal income tax, the government announced that tax for income of ₹0- ₹3 lakh is nil, for income above ₹3 lakh and up to ₹5 lakh will be taxed at 5 per cent, for income of above ₹6 lakh and up to ₹9 lakh will be taxed at 10 per cent and for income above ₹12 lakh and up to ₹15 lakh to be taxed at 20 per cent and above 15 lakh at ₹30 per cent.
{{/usCountry}}"Not only salaried, even non-salaried people who are also ordinary people, we have widened the slabs, reduced the tax slabs from 6 to 5 slab. We believe that many people will shift to this scheme," CBDT chief said.
"I assure that this scheme will be beneficial for anyone whose income is up to ₹7 lakh. The person who is salaried class and earns more than 7 lakh then we have given him the benefit of standard deduction of ₹50,000, this means that if someone's total income is 7.5 lakhs, then even after getting the deduction of 50,000, his income will remain 7 lakh and he will not have to pay any tax," he explained.