India should have a single direct tax regime rather than two regimes. The first one is the old one and the other one is the new one. The revenue secretary mentions that the taxpayers have the choice to choose from the two regimes. However, around 70% are choosing the new tax regime. It clearly shows the majority of the new site. Following are details about India’s tax regimes.
Why India Needs Single Direct Tax Regime?
India needs a single direct tax regime. Around 70% of the taxpayers want to have a single direct tax regime instead of the two. Secretary of the Department of Revenue, Ministery of Finance, Sanjay Malhotra mentions that there must be a single tax regime instead of two. The taxpayers have a choice between the old tax regime and the new tax regime. However, 70% of the taxpayers are choosing the new tax regime. The old tax regime offers a lot of deductions and exemptions. However, the tax rates are high.
On the other hand, the new tax regime provides fewer deductions while the tax rates are low. However, the response is not in favour of the change instantly. While the Income Tax Act is as lengthy as 1600 pages. Thus, the amendments won’t be easy. LTCG (Long Term Capital Gains) hike to 12.5%. The change focuses on the reduction of the LTCG Tax which was earlier 20% to 12.5%. Also, there is an increased tax buoyancy. The idea is also supporting Viksit Bharat. The new tax regime is saving more on taxes. Thus, it leads to more money saved by the people.
More the people save, more will be consumption. The budget’s main focus is to simplify tax. The tax buoyancy is leading to a 40% increase in GDP. In conclusion, the Revenue Secretary prefers a single direct tax regime rather than two. The main reason behind this is to promote simplicity in the tax regime. The major indication tat the taxpayers prefer the new tax regime is