The Budget makers are discussing possible provisions that will promote a new regime in personal income tax, sources tell Business Today Television.
One such provision under consideration, according to sources, is a tax-free slab up to Rs 5 lakh in order to lure more individuals to file income tax returns.
"It is important to note that a large number of people in India who file their returns show an income of less than Rs 7 lakh per annum. So, for most taxpayers, the old tax regime is more beneficial as they don't have to pay taxes because of the exemptions and deductions. Tax outgo in the old regime was comparatively low due to deductions under Sections 80C and 80D," said an official.
The centre is in serious discussions on how the salary class can benefit from the alternative tax regime. The government is of the opinion that there is a need to relook the whole personal income tax system and come out with a single regime with larger slabs and a smaller number of exemptions.
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