New tax regime is very attractive now

This is especially so for high-income individuals who don't utilize most exemptions and deductions of the old regime

The finance minister went all out to woo taxpayers into the fold of the concessional tax regime, popularly known as the new tax regime.

Not many taxpayers have shifted to the new concessional tax regime since its introduction in budget 2020. Most individuals have continued with the old tax regime.

With budget 2023 unveiling multiple big changes by introducing standard deduction of 350,000, raising the basic tax exemption limit to *3 lakh, tweaking the tax rates and reducing the highest surcharge rate-all under the new tax regime, the needle has definitely moved in favour of this regime.

The new tax regime for individuals and Hindu undivided families, or HUFs, brought via Section 115BAC of the Income Tax Act was aimed at bringing in a lower rate and a simpler tax system from 1 April 2020. Taxpayers could choose between the new and the old regime. Opting for the new regime meant taxpayers would be charged slightly lower tax rates but would have to forgo most deductions and exemptions available to them under the old regime.