Budget 2025 Expectations: In Budget 2020, the Modi government announced the introduction of the New Tax Regime, offering taxpayers the option to benefit from lower tax rates under simplified tax slabs, but without deductions and exemptions. Since its launch, there has been ongoing debate and speculation about whether the government should completely scrap the Old Tax Regime or phase it out gradually.
Speculation also surrounds the timeline for the complete removal of the Old Tax Regime, as taxpayers have repeatedly expressed concerns about the complexities arising from having two parallel tax systems. Despite the New Tax Regime being made the default option in Budget 2023, these concerns persist.
With Finance Minister Nirmala Sitharaman gearing up to present her second full-fledged Budget under the Modi 3.0 government on February 1, anticipation is running high. Speculations are rife, and taxpayers are once again demanding the removal of the dual tax regime system in favor of a single tax regime to simplify compliance and reduce complexities for taxpayers.
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Complexities around having two tax regimes
Experts too have been highlighting the complexities of the current system and suggesting measures to simplify and rationalise individual taxation.
CA (Dr.) Suresh Surana, a seasoned expert in taxation, said, “Most individual taxpayers, especially salaried individuals, compute their tax liability on their own. Without professional assistance, it becomes difficult for them to assess and choose the most favourable tax regime.”
He also pointed out that a taxpayer earning income from a business or profession who opts out of the new tax regime under Section 115BAC can revert to it only once, making the process less flexible.
Budget 2025 Expectations: Scrapping Old Tax Regime logical step?
Shared his insights on the potential changes in direct taxation in the upcoming Budget 2025 on personal taxation, Vivek Jalan, Partner at Tax Connect Advisory Services LLP,
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