Curated By: Business Desk
Last Updated: August 23, 2023, 18:35 IST
Nearly 5.5 crore individuals opted for this option.
It is reported that individuals filing ITRs before the end of July did not incur any penalties or charges.
Finance Minister Nirmala Sitharaman announced income tax relief, especially for those with salaried incomes in the 2023-24 Budget. As per the Income Tax Department, the year 2023-24 witnessed a filing of Rs 6.77 crores ITR by July 31. This shows an increase in the rate of ITR filing as compared to last year.
No penalties or charges will be imposed on Individuals filling ITR before the end. According to a recent report by Moneycontrol, the new tax regime is gaining traction in the 2023-24 financial year. So far, around 5.5 crore individuals have opted for this option while filing their ITRs.
Three key factors are the reasons behind individuals adopting the new tax regime. First is a higher basic exemption limit, followed by attaining the benefit of a standard deduction and the reduced complexity associated with ITR filing.
The new tax system includes significant changes to both the basic exemption threshold and tax brackets. Apart from this, the budget has introduced a higher cap on the tax rebate available through section 87A within this new taxation structure. Individuals opting for the new structure won’t be liable to pay taxes on their yearly earnings up to Rs 7.27 lakh.
The new tax regime grants tax exemption for income between 0 to 3 lakh rupees. Individuals earning income ranging between Rs 3 to 6 lakh are taxed at a 5 per cent rate, while those between 6 to 9 lakh face a 10 per cent tax. Earnings of 9 to 12 lakh incur a 15 per cent tax, while the tax rate rises to 20 per cent for incomes between 12 to 15 lakh. Any yearly income exceeding 15 lakhs is subjected to a 30 per cent tax.
Earlier only employed individuals following the old tax structure could enjoy the benefit of a standard deduction. But with the changes introduced in the 2023 Budget, the advantages are extended to those who opt for the new tax regime. This implies that taxpayers can now claim a deduction of Rs 50,000. Moreover, those earning Rs 15 lakh or beyond attain an increased standard deduction benefit of Rs 52,500.
A senior government official stated that it’s not surprising if 5.5 crore taxpayers have opted for the new tax regime. Those falling in the tax slab of between Rs 7.5 lakh to 8 or 10 lakh opt for a hassle-free route to filing income tax, one that they identify in the new tax regime.
