Income Tax Act: Finance Minister Nirmala Sitharaman has made a big announcement in the Budget Speech. She said that the new Income Tax Bill will be presented in the Parliament next week. Many big changes will be seen with the arrival of this new bill.
Income Tax Act: What is New?
The new Income Tax Act will be introduced in the Parliament during the budget session. The important thing to note is that this is not an amendment, but a completely new law. Recently its draft was with the Law Ministry.
The main objective of this new Act is to make the existing Income Tax Act of 1961 more simple, clear, and easy-to-understand.
What changes can be made in the new Income Tax Act?
Simple Language: The law will be written in simple language so that common people can easily understand it.
Obsolete Provisions will be removed: Rules that are no longer necessary will be removed.
Tax disputes will be reduced: The focus will be on reducing disputes.
Compliance will be made easy: The process will be made even simpler for taxpayers.
For this, the Income Tax Department has taken about 6,500 suggestions from the public and industry.
Popularity of New Tax Regime increased
The Finance Minister said that now more than 65% of the taxpayers of the country have adopted the New Tax Regime. That means 2 out of every 3 people are now filing their income tax through the new tax regime.
When the New Tax Regime was introduced in the 2020 Budget, people were hesitant. But now this trend has changed.
New Tax Regime Slabs:
₹0-₹3 lakh: Nil
₹3-₹7 lakh: 5%
₹7-₹10 lakh: 10%
₹10-₹12 lakh: 15%
₹12-₹15 lakh: 20%
₹15 lakh ke upar: 30%
Old Tax Regime Slabs:
₹0-₹2.5 lakh: 0%
₹2.5 lakh-₹5 lakh: 5%
₹5 lakh-₹10 lakh: 20%
₹10 lakh ke upar: 30%
Important Point:
At present, under the Old Tax Regime, 30% tax is levied on income above ₹10 lakh. Whereas in the New Tax Regime, this 30% tax is levied on income above ₹15 lakh.
Now we have to see what other new changes happen in the new Income Tax Bill that can become a game-changer for taxpayers!
