More than 60% of taxpayers adopt new income tax regime

MORE TWEAKS NEEDED FOR GREATER TRACTION, SAY EXPERTS

- PRIYANSH VERMA

THE PLANS TO increase buoyancy in tax collections, widening the tax base and increasing the compliance by taxpayers seem to have been aided by the new income tax (I-T) regime in the current financial year. However, experts feel a few more tweaks in the tax rates in the forthcoming interim Budget could make the exemptionfree regime more attractive.

On Monday, the finance ministry reported that a record 81.8 million income tax returns (ITRs) have been filed for the assessment year (AY) 2023-24 as of December 31, which is 9% more than the corresponding period of last year. Personal income tax (PIT) collections have also seen a robust annual growth of 29.4% in April-November. These were touted as a'milestone' by the I-T department on 'X' on December 29.

In fact, the growth rate in PIT collections is the highest in at least 10 years - barring FY22, which was on a low base, as income tax collections had contracted more than 12% in April-November FY21, the pandemic year. After the new tax regime was sweetened in the Budget for 202324, revenue secretary Sanjay Malhotra estimated that around 50% of the taxpayers would adopt the new regime. The earlier version of the exemption-less regime, launched in 2019-20, didn't get much traction among the taxpayers.