Income Tax Regime: The government has not made any official announcement about abolishing the old tax system. However, its discussion is in full swing.
Income Tax Regime: Finance Minister Nirmala Sitharaman is going to present the budget on 1 February 2025. Before this, it is being discussed whether the government will abolish the old tax regime? Let us tell you that the new tax system was introduced during the general budget on 1 February 2020. The old tax regime included many types of deductions and exemptions, so people like it more, whereas in the new tax regime, the tax rates are low, but the benefit of deductions and exemptions is not that much.
The government’s aim is to simplify the income tax system
The Finance Minister had recently said that the government wants to simplify the income tax system, so taxpayers are speculating that the government will abolish the old tax system because the new tax system is simpler than it. In the old tax system, under Section 80C of the Income Tax Act, tax exemption is available on investment up to Rs 1.5 lakh. Similarly, under Section 80D, there is a provision for exemption on health insurance premium, that is, under this, taxpayers can claim deduction on medical insurance premium for themselves as well as the family. This helps in reducing the taxable income.
Will the old tax regime be abolished?
Will the government abolish the old tax regime? Responding to this question, tax and investment expert Balwant Jain told The Mint, “Given the government’s biased attitude towards the new tax system, the increasing number of people adopting it and the fact that the limit of exemptions available in the old system has not been increased after the implementation of the new tax regime, do not be surprised if the Finance Minister completely abolishes the old tax system.” He further said that since the government wants you to give correct information about your income, which is the base of the new tax regime, it is likely to be implemented soon.
