Allow tax deduction for health insurance in the new regime, says ICAI chief

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Mint, he also talked about efficient ways to increase the number of taxpayers in India. Here are some edited excerpts: The default (new) regime, which offers concessional tax rates on total income, without deductions and exemptions, will make both tax compliance and tax administration simple. It will also ensure consistency and certainty.

The default tax regime is the way forward and the old scheme may be discontinued in a phased manner. Examples include not reporting or under-reporting income auto populated in Form 26AS/AIS and a mismatch of income in the income tax return and taxable income statement. Also read | Budget 2024: Know the real tax on your income The holding period is more than 36 months for an investment to be treated as a long-term capital asset and be eligible for indexation benefit and concessional rate of tax under Section 112.

However, to give sector-specific benefits, the holding period for being treated as a long-term capital asset has been reduced for certain assets. For example, to promote the real-estate sector and make it more attractive for investment, the period of holding for land and building was reduced to 24 months. It was reduced to 12 months to incentivise investment in listed securities and units of an equity-oriented fund.

In this case, even though indexation benefit is not available, taxpayers are entitled to a concessional rate of tax at 10% on the capital gains exceeding ₹1 lakh. Investment for retirement is essential for every person and it should not depend on the availability of tax benefits. Since the tax regime has provided incentives for investment and insurance all these years, there is a tendency to consider the current tax benefits while deciding whether to invest.