More than 60% of taxpayers adopt new I-T regime

financialexpress.com:

The plans to increase buoyancy in tax collections, widening the tax base and increasing the compliance by taxpayers seem to have been aided by the new income tax (IT) regime in the current financial year. However, experts feel a few more tweaks in the tax rates in the forthcoming interim Budget could make the exemption-free regime more attractive.

So far, more than 80 million income tax returns (ITRs) have been filed for assessment year (AY) 2023-24, against 75.2 million filed in AY 2022-23. Personal income tax collections have also seen a robust annual growth of 29.4% in April-November. These were touted as a “milestone” by the I-T department on ‘X’ on December 29.

In fact, the growth rate in PIT collections is the highest in at least 10 years – barring FY22, which was on a low base, as income tax collections had contracted more than 12% in April-November FY21, the pandemic year.

After the new tax regime was sweetened in the Budget for 2023-24, revenue secretary Sanjay Malhotra estimated that around 50% of the taxpayers would adopt the new regime. The earlier version of the exemption-less regime, launched in 2019-20, didn’t get much traction among the taxpayers. This was because the tax slabs in the exemption-less regime weren’t attractive after taking into consideration the benefit of various deductions and exemptions available under the old tax regime.

And given the data that has now been compiled by the department for AY 2023-24, official sources say more than 60% of the taxpayers have adopted the new income tax regime, which is now the “default regime”. “Over 50 million ITRs have been filed under the new tax regime,” an official told FE.

The new tax regime offers lower income tax rates with a threshold of Rs