Nearly 70% of taxpayers opted for new PIT regime: CBDT chief
Around 60-70% of the individual taxpayers have likely shifted to the exemption-less personal income tax (PIT) regime, Central Board of Direct Taxes (CBDT) chairman Nitin Gupta said on Tuesday, indicating that the steps announced in the Budget FY24 including making it the “default regime” has worked.
As such, post-refunds PIT receipts jumped 32.5% on year by October 9 in the current fiscal year against the budgeted growth of 11.4% for the whole year, Gupta said.
Though the exemption-less PIT regime was introduced in FY20 Budget, it hadn’t found traction among the taxpayers, till the current year’s Budget made it more attractive with a host of tweaks.
The Budget FY24 raised the rebate limit in the new tax regime to ₹ 7 lakh, meaning that persons with annual income upto that level will not have to pay any tax. The tax structure was changed by reducing number of slabs to five and increasing the exemption limit to Rs 3 lakh, and the benefit of standard deduction was extended to the salaried class and the pensioners including family pensioners.
Moreover. the highest surcharge rate was also reduced from 37% to 25% in the new tax regime for income above Rs 2 crore.
Sudhir Kapadia, partner-tax and regulatory services, EY said: “Earlier when (the exemption-less regime) was introduced in FY20, the deductions were still available, and the slab rates without the deductions were not attractive. So, in the FY20 scheme, low income earners benefited but majority of middle-income and high-income earners did not. The 30% threshold now kicks in 15 lakh per annum income, while earlier the level was Rs 10 lakh per annum.”
Meanwhile, the Centre’s direct tax collections (net of refunds), stood at Rs 9.57 trillion till October 9 in the current
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