Government sources have confirmed that the rates under the involuntary income tax framework might be reduced.
There also is news that the slabs might be revised in the federal budget on February 1.
Read on to find out all the details!
Government Might Reduce Voluntary Income Tax Rates
The government of India is thinking about reducing its voluntary income tax rates, and the upcoming federal budget, which is due on February 1, may include new slabs.
The Prime Minister’s Office would make the final decision, according to both sources, who wished to remain anonymous because the discussions were private.
Although the new optional income tax plan, which was announced in 2020 to simplify tax compliance, offers lower headline tax rates on annual income, experts say it is unattractive to many because it does not permit exemptions on things like housing rentals and insurance.
As per the source, “Allowing exemptions and tax deductions in the new income tax regime would make it complex and this wasn’t the intention while introducing the scheme.”
People Taking Advantage Of New Tax System
Currently, people are free to choose which set of tax rates they want to be subjected to. The number of people taking advantage of the new tax system has not been made public by the government.
The minimum annual income required to be taxed in the nation is 500,000 rupees for an individual.
In comparison to the previous set of rules, that earning between 500,000 and 750,000 rupees ($6,135.72 and $9,203.58) per year pay a 10% tax under the new scheme, while those earning over 1.5 million rupees are subject to a 30% tax rate.
In the Budget 2022, it was announced that 400 new Vande Bharat trains, and 100 Gati Shakti Cargo terminals will be developed in the next 3 years.
Chemical-free farming will be encouraged, and special subsidies to be provided, especially within the 5 kms-corridor of the Ganges
It was also announced that taxpayers can file updated returns within 2 years of assessment year
