By The new taxation regime proclaimed in last year’s budget could get associate exemption boost within the coming Union Budget 2021. variety of state officers have indicated that the exemption list for the new taxation regime with lower tax slabs can currently get a extended list of exemptions to learn taxpayers.
It may be noted that the new tax regime introduced last year’s budget didn’t embody any basic exemptions that area unit allowed underneath the recent regime with higher taxes. The aim of the move is to produce relief to Indian taxpayers and increase disposable net to spice up overall demand.
While specialists had earlier told Asian country these days that major changes in taxation area unit unlikely, it’s doable that the govt could tweak some sections to produce relief to the country’s taxpayers. Any major tax overhaul, however, is unlikely.
A government official quoted in associate Indian categorical report aforesaid that the new taxation regime didn’t devour the manner it absolutely was anticipated and further that a move to incorporate a lot of exemptions for people that invest in provident fund and alternative schemes.
Meanwhile, there area unit high possibilities that the govt can extend the Leave Travel Concession (LTC) money voucher theme, that was introduced last year within the wake of the Covid-19 pandemic. voters conjointly expect the govt to increase tax advantages for medical expenditure.
All regarding the optional tax regime
The optional tax regime was introduced by the govt within the Union Budget 2020-21 and it had lower tax slabs as compared to the recent structure. Taxpayers got associate choice to either selected the new regime with lower tax slabs or the recent one with tax advantages however higher slabs.
The optional regime could additional get associate exemption boost within the coming budget because the government appearance to extend its adoption rate among taxpayers.
At present, people who select the new taxation regime are going to be taxed underneath lower slabs, however they’ll not be ready to claim deductions for investments underneath varied sections of the taxation Act. in addition, they’ll conjointly not be eligible for the quality deduction of Rs 55,000 underneath the recent taxation system.
In the optional regime, individual taxpayers area unit needed to pay ten per cent tax for financial gain between Rs 5 lakh and Rs 7.5 lakh & 50 per cent
