BT Budget Roundtable: New tax regime will be a game changer, says CBDT's boss Nitin Gupta

Nitin Gupta, Chairman, Central Board of Direct Taxes (CBDT) believes that the new tax regime will be a game changer. In the BT Budget Round Table 2023, Gupta said that the proposed changes will also provide wings to the new tax regime. His views came after finance minister Nirmala Sitharaman in her Budget speech on February 1 proposed changes to the personal income tax under the new regime with the focus on providing relief to the society. The first change was proposed in the slab rate where in the income is exempted from tax upto Rs 3,00,000 as against the erstwhile Rs 2,50,000.

Further, the benefit of a standard deduction of Rs 50,000 is proposed to be extended to the new tax regime for individuals earning salary income. Further, the rebate under section 87A has been increased from Rs 12,500 to Rs 25,000 only under the new tax regime making income upto Rs 7 lakh tax free.

Gupta said that the slabs have been widened. “The number of slabs have been reduced and the surcharge for the rich and super rich have been moderated. So, a lot of changes are there in spite of the fact that it is deduction and exemption free,” he said.

He further added that there is something which will remain with the taxpayers in terms of the amount of taxes. “The choice is left to the taxpayer to decide what really they want to do and therefore we believe that it could be a game changer. As you all know the scheme is there for 2020 but it could not take that wings which should have taken and we believed that the proposed changes, it is going to take wings and it will move forward in a very fast way,” he said.

On asking, is the government trying to encourage people to save less, spend more and pay extra tax? Gupta explained that as a taxpayer even if one chooses to be in the proposed regime, he is free to make a contribution towards savings or anything. So, that's not the case.

“We are looking from the taxation perspective. You can file the return of income in a very simplistic manner without the help of a professional. All these are pluses and from the tax administration perspective, what we are coming across is that certain people are misutilising the trust which we have reposed in them by claiming wrongful deductions and exemptions. So probably, that thing would also be a thing of the past,” said Gupta.

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