Committee will submit report on Income Tax within 6 months, focus will be on simplifying it: Finance Minister

In 2020, the government brought a new tax regime. There was no provision for promoting savings. There was no incentive either. This time again the Finance Minister reiterated the same commitment in the budget.

Modi Government has given a lot of relief to the middle class and salaried class by making major changes in the Income Tax New Regime in Budget 2024. In the new regime, now tax will have to be paid at the rate of 5% on income of Rs 3 lakh to Rs 7 lakh. Earlier it was up to Rs 6 lakh. Changes have also been made in other slabs of the new tax (Income Tax) regime. Apart from this, the standard deduction has also been increased from Rs 50 thousand to Rs 75 thousand. Taxpayers will benefit up to Rs 17,500 from both these changes. Whereas no change has been made in the old tax regime.There is confusion among tax payers regarding the old tax regime and the new tax regime. However, the middle class was expecting some more relief regarding income tax in the budget. Meanwhile, Finance Minister Nirmala Sitharaman said that the committee will submit its report on income tax within 6 months. We are focusing on simplifying income tax.

In the budget, the government has also made changes in other slabs of the new regime. 10% tax will be levied on income between Rs 7 lakh to Rs 10 lakh. 15% tax will have to be paid on income between Rs 10 lakh to Rs 12 lakh. There is a provision of 20% tax on income between Rs 12 to 15 lakh and 30% tax on income above Rs 15 lakh.

“Regarding income tax, the central government is doing a detailed review of the Direct Tax Code. An internal committee is preparing its report, which will come within 6 months. Sitharaman said, “This exercise is to bring the new Direct Tax Code. No, rather it will be a review of the Income Tax Act. Its purpose is to make the Act short and simple, so that it is convenient to read and understand.”

In 2020, the government brought a new tax regime. There was no provision for promoting savings. There was no incentive either. This time again the Finance Minister reiterated the same commitment in the budget. He has expanded the scope of the new tax regime. However, no change has been made in the old tax regime.

After the change in the new tax regime, income up to Rs 7.75 lakh has now become tax free for those choosing it. In the new tax regime, now standard deduction of Rs 75 thousand will be available instead of Rs 50 thousand. While if you choose the old tax regime, only income up to Rs 2.5 lakh will be tax free, but under Section 87A of the Income Tax Act, you can save tax on income up to Rs 5 lakh.