The government had implemented two income tax regimes in the year 2020 to provide convenience to the taxpayers. In the new regime, the slab rates were kept low, but 70 types of income tax exemptions were abolished.
Now, if we look at its figures after three years, it is known that the number of taxpayers who choose the new option is very less. The chairman of the Prime Minister’s Economic Advisory Council says that if taxpayers have to be attracted towards the new regime, they will have to be encouraged.
new Delhi. For the convenience of the taxpayers, the government had implemented two tax regimes in the budget of the year 2020. One had lower slab rates, but no tax deduction. The rates were higher in the second slab, but many types of tax exemptions are included. Now after three years, the number of taxpayers adopting the new tax regime is very less. On this, Bibek Debroy, Chairman of the Prime Minister’s Economic Advisory Council, has said that if taxpayers have to be brought towards the new regime, then they will have to be encouraged.
The picture becomes clear by looking at the intentions of the taxpayers between the two tax regimes in the recent figures. About 6 crore taxpayers have filed income tax returns this time for the financial year 2021-22. Out of this, only 1 percent people adopted the new tax regime, while most of the taxpayers thought it better to go with income tax exemption schemes. Actually, under the new tax regime, the government has abolished about 70 types of tax exemptions. Although its slab rates are much lower than the old regime, taxpayers are not seeing any benefit in it.
It is necessary to attract taxpayers
According to the Economic Times, the chairman of the Prime Minister’s Economic Advisory Council says that if the new tax regime is to be effective and attract taxpayers, then they have to be given some incentive. Taxpayers are paying tax at a lower rate in the new regime but they get the option to save more in the old regime. Under the new regime, there is neither tax exemption on home loan nor exemption on any kind of investment.
Also warned about the growth rate
Debroy said that India’s growth rate is estimated to be 5.8 percent in the current financial year, but its pace will increase further in the next financial year. He said that not only in this financial year but also in 2023-24, the burden of expenditure will remain on the government. Expenditure on schemes like education and social security will have to be increased and then the growth rate can pick up to 6.5 per cent.
Inflation will come under control soon
The chairman of the EAC says that the steps taken by the Reserve Bank to control inflation are now visible. Retail inflation in November has come down to an 11-month low of 5.9 per cent and is also within the RBI’s target of 6 per cent. At present, the pressure of inflation will remain and it may take time to reach the fixed range of 4 percent.
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