In Short:
Finance Minister Nirmala Sitharaman announced that 72% of taxpayers have opted for the new tax regime, which offers a simpler and more straightforward system compared to the previous one. Speaking at the Income Tax Department’s 165th anniversary, she emphasized that this new tax regime is designed to be user-friendly, with fewer exemptions and complications. Sitharaman praised the high uptake as a positive outcome, noting that it was introduced as an option rather than a mandate. She also highlighted the substantial increase in tax filings and the efforts of tax officers in handling the system’s complexities. Future reforms to further simplify the tax code are anticipated.
Key Points:
- 72% of taxpayers have switched to the new tax regime, which is seen as simpler and more beneficial.
- The new tax regime does not include exemptions, aiming to reduce complexity.
- Finance Minister Sitharaman described the shift as a sign of the regime’s success and acceptance.
- The new tax regime is optional and not mandatory, allowing taxpayers to choose based on their preference.
- This year saw a record 7.28 crore Income Tax Returns (ITRs) filed by the July 31 deadline, a 7.5% increase from the previous year.
- 58.57 lakh new tax filers were added this year, reflecting broader engagement with the tax system.
- Sitharaman acknowledged the challenges faced by tax officers over the past decade and encouraged clearer communication with taxpayers.
- Upcoming reforms will include further simplification of parts of the Tax Code within six months.
