FinMin expects at least 80% of taxpayers to move to new tax regime
Mumbai: The finance ministry expects at least 80 per cent of the taxpayers to move to the new income tax regime, Revenue Secretary Ajay Bhushan Pandey said. The budget 2020-21 has introduced more tax slabs and offers higher limits provided the taxpayer is ready to forego all the existing exemptions and deductions including home loan interest, other tax savings investments. "We feel at least 80 per cent of the people will come to the new scheme," Pandey said during an interaction with opinion makers in the financial capital. He said the government did an analysis of 5.78 crore taxpayers before the budget and found that 69 per cent of them would save on tax payouts under the new system, while 11 per cent were found to be favouring the old regime.
Of the remaining 20 per cent taxpayers, there will be people who want to avoid the hassle of paperwork and may wish to switch over to the new regime, he said. The government was in a catch-22 situation because it wanted to lower tax outgoes for the people and ensure that it eases the process of tax, but did not want to disturb the system due to which it made a beginning by giving people options, he said. He noted that corporates were also given similar option when the taxes were reduced in September, and that 90 per cent of corporates have embraced the exemption-free approach for lower tax rate.