New Delhi: Finance minister Nirmala Sitharaman stated that there were no plans in the table yet to axe the old tax regime which was savings based on allowed deductions based on investment in government schemes as well as purchasing or building a home. Sitharaman said this while responding to a question at the post-Budget press conference.
Sitharaman in her Budget speech shared revised tax slabs under the new tax slab without so much as mentioning the old tax regime, evoking doubts whether the old tax regime was still in effect. The new tax regime tax slab revision has also received a provision for an enhanced standard deduction of Rs 75,000. Taxpayers can now save Rs 7.75 lakh under the new tax regime.
Responding to potential deficits in revenue on account of the tax relaxation provided to taxpayers, Sitharamaa said that the government’s efforts to widen the tax net are ongoing, whether direct or indirect. However, the government will also bridge the gap by utilising PSU dividends and optimising the utilisation of assets for monetisation to generate revenues. To date, 70 per cent of the 4 crore tax returns filed for the ongoing assessment year were under the new tax regime. To be sure, the government wants to move towards a simplified tax regime while also also checking tax evasion, added the finance minister.
New Tax regime revised slabs. (Photo credit: News9)
New vs old tax regime
The old tax regime is a deductions-based tax regime while the new tax regime is a consumption-based tax regime. The former allows taxpayers to seek deductions for investment in government schemes. To be sure, the new tax regime has also allowed a standard deduction as well as accommodation for the National Pension System. However, NPS does not provide deductions for loans secured to purchase property.
Jewellery import duty cuts
Duty cuts on gold are expected to improve the availability of precious gems and jewels, improve employment and also to keep a check on smuggling amid rising demand. Gems and jewellery is a labour intensive sector and contributes 8 per cent to Indian exports, the finance secretary said. A special harbour rate was announced for foreign miners to again promote employment in the sector.
The revision of tax slabs under the new tax regime in Budget 2024 without any mention of the old tax regime led to some fears regarding its continuity. HEre’s what finance minister Nirmala SItharaman said on the matter. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
