Around 5.5 crore taxpayers may have switched to the new tax regime introduced in the budget for the current fiscal year, based on initial estimates from the revenue department. These taxpayers mainly earn up to Rs. 7 lakhs and are primarily younger individuals with incomes up to Rs. 7 lakhs, according to a senior official from the department.
The shift is notable since the government revamped the new tax regime in the budget for the fiscal year 2024, aiming to make it more attractive. Following its introduction in the 2020-21 fiscal year, a substantial number of taxpayers refrained from adopting the new regime.
Even though this is yet to be verified.
The official stated that there is no obvious reason why 55 million individuals would not switch to the new tax regime. According to a tax expert quoting the official’s statement, many young taxpayers earning approximately Rs 7.5-8 lakh, or even up to Rs 10 lakh, prefer a flexible and straightforward approach to income tax filing.
The official stated that there are many taxpayers were agree to experimentation to consider whether the new tax regime was beneficial to them. The option for the taxpayers is available to switch to the old tax regime in the next financial year if it benefits them.
The next assessment year 2024-25 will disclose the income and tax obligations for the current financial year, after this the exact number of individuals opting for the new tax regime would also be released.
Read Also: Easy Way to Switch New to Old Income Tax Scheme for Taxpayers
According to the income-tax department’s data for the fiscal year 2023, 4.84 crore taxpayers were having a taxable income of up to Rs. 5 lakh. Additionally, over 1.12 crore individuals had a taxable income between Rs. 5 lakhs to Rs. 10 lakhs, whereas only 47 lakh taxpayers were within a taxable income between Rs. 10 lakhs to Rs. 20 lakhs.
Among these number of these taxpayers, around 20 lakh individuals had a taxable income between Rs. 20 lakhs and Rs. 50 lakh, and 3.8 lakh taxpayers were having an income between Rs. 50 lakh and Rs. 1 crore.
The data further disclosed that around 2.6 lakh taxpayers had a taxable income of more than Rs. 1 crore.
Through a statement, the tax department stated that the total number of Income Tax Returns (ITRs) filed for the assessment year 2023-24 till July 31, 2023, is more than 6.77 crore, which is a 16.1% more compared to the total ITRs filed till 31st July in the previous assessment year 2022-23 (5.83 crore).
Source: Business Standard
