Now about 72 percent of taxpayers are using the new regime. One reason for this is that there is almost no paperwork in it. Tax experts say that the biggest problem faced by taxpayers is paperwork. Many people do not show interest in filing income tax returns only because they do not understand its rules properly.
Taxpayers have the highest expectations from the Union Budget 2025. The reason for this is a news in the media, which said that the government is thinking of reducing income tax to increase consumption. This has increased the expectations of those taxpayers whose annual income is Rs 15-20 lakh. Currently, in both the new and old income tax regimes, people with an annual income of more than Rs 10-15 lakh have to pay the highest tax of 30 percent. Economists and industry representatives have told the government that if taxes are reduced on middle class people, then this can increase consumption.
Rules of new income tax regime are easy
Tax experts say that the government took a big step in the Union Budget 2020 to simplify the income tax rules. Finance Minister Nirmala Sitharaman launched the new income tax regime. In this regime, taxpayers do not get the benefits of most deductions, but the tax rates are low. Initially, taxpayers did not show much interest in this regime. But, now it is getting a good response from taxpayers. The reason for this is that the government is constantly trying to make this regime attractive.
Taxpayers’ interest in the new regime is increasing
Now about 72 percent of taxpayers are using the new regime. One reason for this is that there is almost no paperwork in it. Tax experts say that taxpayers face the most difficulty with paperwork. Many people do not show interest in filing income tax returns only because they do not understand its rules properly. If people with low income are freed from this paperwork, then compliance will increase.
No tax on 70% of people filing ITR
According to the data of Assessment Year 2023-24 of the Income Tax Department, the taxable income of 70 percent of the people filing income tax returns was Rs 5 lakh or less. This means that the tax liability on these 70 percent taxpayers is negligible. The income of 88 percent of the people filing returns is less than Rs 10 lakh. The income of 94 percent of the people is less than Rs 15 lakh.
The government has a chance to make income up to 10 lakh tax-free
The above data makes it clear that the government gets more revenue from those people whose annual income is more than 10-15 lakh rupees. Therefore, if the government makes income up to 10 lakh rupees tax-free, then it will provide great relief to crores of people. The way inflation has increased in the last few years, people with an annual income of 10-15 lakhs are facing a lot of problems. Especially in metro cities like Delhi-Mumbai, it has become difficult to survive on this income. This is the reason why economists have advised the government to reduce tax on people with an income of 10-15 lakhs.
