Most still choose old tax regime, new one making inroads

livemint.com:

NEW DELHI : An overwhelming majority of personal income tax filers have opted for the old tax regime that allows a host of tax exemptions, but the new regime with more flexible tax rates and fewer exemptions is beginning to attract more takers, according to professionals who assist taxpayers in filing their returns. In the just-concluded season for personal income tax return (ITR) filing, 85% of individuals have opted for the old regime, and the rest for the new regime, showed an analysis by leading fintech software as a service (SaaS) company Clear (formerly ClearTax), based on data of tax returns filed using its tax return filing service.

Clear has more than 5 million taxpayers as customers, in addition to many professionals and small and large businesses. While this is only a part of the overall tax returns filed, it points to the broader trends in ITR filing.

In the current assessment year, the Central Board of Direct Taxes (CBDT) reported 67.7 million ITRs by the end of July, the due date for personal ITR filers, showing an improvement of over 16% from the year-ago period. According to Clear, there is “a notable shift in taxpayer preference with 15% of individuals choosing the new regime, whereas 85% still opt for the old regime." This, it said, highlights a growing interest in the new regime and its potential benefits over the traditional system.