New tax regime more likely to have attracted 5.5 crore taxpayers in FY24: Report

New Tax Regime Vs Old Tax Regime For FY24: Around 5.5 crore taxpayers could have switched to the brand new tax regime within the present fiscal yr, as the brand new revenue tax system has change into extra interesting for the monetary yr 2023–24 with a rebate on revenue as much as ₹7 lakh, mentioned Business Standard in its report citing a senior authorities official.

The majority of those taxpayers, it was said, have taxable incomes of as much as ₹7 lakh.

“We don’t see any purpose why 55 million gained’t shift to the brand new tax regime. Most younger taxpayers, incomes round ₹7.5-8 lakh, and even as much as ₹10 lakh choose revenue tax submitting to be versatile but simple,” said Business Standard (BS) in its report quoting the official.

Financial Minister Nirmala Sitharaman brought about income tax relief for individual taxpayers, particularly those on salaries, in the Budget 2023–24. While the previous income tax system remained unaltered, the new income tax regime increased the rebate to ₹7 lakh from ₹5 lakh. That indicates there is no tax to be paid by individuals making up to ₹7 lakh. With margin relief applied, there is no tax due for individuals making up to ₹7.27 lakh crore.

According to the Business Standard report, under the new tax regime, an annual income up to ₹7 lakh is tax-free, however the Finance Act, 2023 grants a ₹25,000 rebate, providing a marginal reduction of up to ₹27,000. For tax reasons, income up to ₹7.27 lakh would be treated as equal to ₹7 lakh, meaning it will be tax-free.

In order to ascertain whether the new tax system was advantageous to them, many taxpayers were also eager to try new things. The official said the taxpayers can go back to the old tax regime in case they find it more beneficial, according to the Business Standard report.

Only in the following assessment year (2024–2025), when the earnings and tax liabilities for the current fiscal year are displayed, will it be evident how many people have chosen the new tax regime, said Business Standard report.

“The revenue tax division’s FY23 knowledge reveals that 4.84 crore taxpayers had a taxable revenue of as much as ₹5 lakh. More than 1.12 crore individuals had a taxable revenue between ₹5 lakh and ₹10 lakh, whereas the variety of taxpayers with taxable revenue between ₹10 lakh and ₹20 lakh stood at 47 lakh, in line with the report,” talked about Business Standard.

Twenty lakh taxpayers have been within the ₹20 lakh– ₹50 lakh tax bracket, and three.8 lakh taxpayers had taxable revenue between ₹50 lakh and ₹1 crore. Similarly, 2.6 lakh taxpayers had taxable revenue of greater than ₹1 crore, as per the BS report.

Also Read: Budget 2023: How Nirmala Sitharaman tried to simplify tax expertise

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Updated: 22 Aug 2023, 03:18 PM IST

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