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Expansion
The Finance Ministry is planning to review the tax regime free of exemptions or concessions. It has been proposed to be reviewed so as to make it more attractive to individual income tax payers. Sources said the government intends to set up a tax system that does not have any concessions.
With this, the complicated old tax system with exemptions and deductions can be done away with. In the budget of 2020-21, the government had implemented a new tax system. In this, taxpayers were given the option to choose between the old regime with various deductions and exemptions and the new regime of lower rates without exemptions and deductions. agency
On the experience of the new tax regime, sources said, there are clear indications that those who have repaid their debts want to opt for the new tax regime as they do not have the option to claim any exemption. . The reduction in taxes in the new tax regime will make it more attractive.
Arrangement was also brought for corporate
A similar tax regime was introduced for corporate taxpayers also in September 2019. In this the tax rates were reduced. Also exemptions or concessions were abolished.
In the new tax regime introduced on February 1, 2020 for individual income tax payers, no tax is levied on annual income of Rs 2.5 lakh. An income of 2.5 to 5 lakhs attracts a tax of five per cent.