NEW DELHI: India’s tax landscape has undergone a transformation with the introduction of the new income tax regime, a key highlight of the Union Budget 2024-25.
An increasing number of taxpayers have opted for the New Tax Regime this year. Out of the total ITRs of 7.28 crore filed for Assessment Year (AY) 2024-25, 5.27 crore have been filed in the New Tax Regime compared to 2.01 crore ITRs filed in the Old Tax Regime.
Thus, about 72 per cent of taxpayers have opted for the New Tax Regime, while 28 per cent continued to be in the Old Tax Regime.
The government has placed a strong emphasis on the new tax regime, incentivizing taxpayers to adopt it for a simpler, more beneficial approach to tax compliance.
One of the most significant advantages of the new regime is its simplicity. The days of sifting through numerous deductions and exemptions are over.
The Confederation of Indian Industry (CII) reported that the new structure offers a clear and straightforward calculation of tax liability, saving time and reducing the chances of errors and misunderstandings. For individuals juggling multiple income sources or those who find tax filing daunting, the new regime is a welcome change.
The new tax regime features lower tax rates, resulting in more disposable income for taxpayers. With increased financial flexibility, individuals can make more informed decisions about their spending, savings, and investments.
Whether planning a vacation, making a down payment on a house, or investing in retirement, the extra money can make a significant difference.
The government aims to broaden the tax base through this new regime.