Nirmala Sitharaman, the union finance minister, said on Wednesday that the new taxation system has more favorable incentives so that people may easily switch from the previous system. However, the finance minister emphasized that no one is being forced to switch to the new taxes system by the government.
“The Budget made significant changes to the personal income tax that will help the middle class.” According to Nirmala Sitharaman, at a media conference, “the new taxation system has now gained greater traction and incentive so that individuals can now transfer to the new regime from the old regime without hesitation.”
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“No one is being forced by us. Those who choose to continue with the previous (taxation system) can do so. However, the new one is appealing because it offers a bigger rebate. Additionally, it offers simplified and smaller slabs, smaller lower tax rates, and attractively broken-down slabs,” she continued.
Nirmala Sitharaman, who has delivered the Union Budget for 2023–2024, had earlier proposed five significant reforms to the personal income tax system, including an increase in the rebate ceiling and adjustments to the tax slabs under the new system of taxation. Under the new tax system, she suggested increasing the refund cap from the current $5 lakh to $7 lakh.
The minister also suggested increasing the tax exemption threshold to 3 lakh and reducing the number of slabs to five. Nirmala Sitharaman stated that although the new income tax system would now be the default tax system, citizens will still have the choice to take use of the previous tax system’s benefits.
