The previous income tax system was as follows: In the face of growing inflation, the government is planning to hit taxpayers with a major tax increase. The government has the option of repealing the old tax structure, which includes 70 different sorts of exemptions. Tarun Bajaj, the Revenue Secretary, has proposed this.
The previous income tax system was as follows: People’s backs have been broken by rising inflation. Meanwhile, the government is prepared to hit taxpayers with yet another major tax increase. The government has the option of abolishing the old tax structure, which includes 70 different sorts of exemptions. Actually, Revenue Secretary Tarun Bajaj made this recommendation in order to increase public interest in the new tax system.
Tarun Bajaj made an offer.
It’s worth mentioning that, despite the new tax system’s debut, people are still more drawn to the previous income tax system. People are ignoring the new tax system in such a situation. This idea was presented by Tarun Bajaj in order to encourage taxpayers to switch to the new income tax structure.
In 2020-21, new tax slabs will be implemented.
It’s worth noting that the new income tax system went into effect in 2020. Although the tax rate is low, there is no provision for deductions. Due to the lack of exemption among taxpayers, less interest is shown in such a circumstance. Even so, the vast majority of taxpayers continue to file their income tax returns under the previous tax system.
Why don’t individuals choose a new slab?
‘People don’t want to use the new system because of this,’ Tarun Bajaj said. As a result, unless we lessen the appeal of the old system, individuals will be hesitant to adopt the new one. We won’t be able to lower our tax rate unless we do this.
a new tax bracket
In the new income tax bracket of up to 5 lakhs, no tax is due.
Only 10% tax is now due on amounts between 5 lakh and 7.5 lakh.
If your income rises from 7.5 lakhs to 10 lakhs, you must now pay 15% tax.
If your annual income is between Rs 10 lakh and Rs 12.50 lakh, you must pay 20% tax under the new slab, while those earning between Rs 12.5 lakh and 15 lakh must pay 25% tax. The 30% tax rate on earnings over 15 lakhs remains unchanged.
