Old tax regime end: Less than a week is left for the presentation of Budget 2025. The government has also hinted at making changes in the income tax, but a big question still remains whether the government will discontinue the old regime of income tax and only one new tax regime will remain in the country. Let’s understand the whole story…
Old tax regime end: While presenting the Budget 2025, Finance Minister Nirmala Sitharaman can make big announcements regarding income tax this time. There is a discussion everywhere that the government can end the old tax regime and only one new tax regime can remain in the country. The government has also given many indications related to this, but is this really going to happen? What is the opinion of experts on this? Let’s understand…
In the last budget, the Finance Minister had announced that the income tax law in the country would be reviewed. For this, a committee of officials was also formed, whose report is to be decided soon. Apart from this, since the new tax regime came in the country in 2020, the government has not made any changes in the old tax regime.
Emphasis on making the new tax regime attractive
The government is completely focused on making the new tax regime popular. That is why in the last 4 years, the government has worked on increasing the tax slabs, exemption limit and adding standard deduction to it. In such a situation, there is a possibility that the government may bring some changes in the new tax regime this time too. In the old tax regime, in 2014, Finance Minister Arun Jaitley had increased the limit of 80C to 1.5 lakhs, after which the option of income tax rebate was added, but no major change has happened in the old regime since then.
Tax expert Balwant Jain told TV9 Digital that the government’s focus is on the new tax regime. Therefore, the government can make some changes in it, this cannot be denied. But the government is unlikely to completely abolish the old tax regime. For this, the government will have to make a completely new income tax law, which is a time-taking process. Although this will not happen now, it will happen someday, even if it is late.
Balwant Jain said, “The government’s attitude towards the new tax regime shows that the government is focused on it. The number of taxpayers adopting this regime is also increasing. At the same time, there has been no change in the old tax regime after the introduction of the new tax regime. The reason for this is that the government wants people to tell it their true income, so that it is easier for it to make policies. There are no deductions in the new income tax regime, so it is easy to estimate the real income of people”
Difference between old and new tax regime
To popularise the new tax regime, the government has made it the default system. Standard deduction was added to it, the limit of which was earlier Rs 50,000 which later increased to Rs 75,000. In this way, income of Rs 7.75 lakh has become tax free in this regime. Whereas in the old tax regime, the limit of tax free income is Rs 2.5 lakh, while the government gives tax rebate on income up to Rs 5 lakh.
In this way, income up to Rs 5 lakh becomes tax free. However, in this tax regime, taxpayers get the benefit of tax exemption for depositing money in many places from savings to home loan, health insurance, pension. Due to this, the exact income of a person cannot be estimated.
