Income tax

The government could make the new simplified personal income tax system more attractive

Government aims to make new simplified personal income tax regime more attractive to working class, sources say CNBC-TV18.

The government is considering fine-tuning the new tax regime to encourage taxpayer adoption. In addition, the standard deduction and interest against the home loan are expected to be associated, sources said.
“Housing rent and medical insurance premium can also be included in the new tax regime. Finance Minister Nirmala Sitharaman is also expected to encourage taxpayers to switch to a new direct tax regime and grant other exemptions Talks are even underway on further relief for individual taxpayers,” the sources added.

Here are the proposed proposals:

1. Increase in the existing standard deduction limit

2. Increased medical insurance premium window

3. Simplification of capital gains tax rules

However, no final decision has been made to date. The direct tax proposals could be finalized after January 20.

It is important to note that out of over 6 crore taxpayers, 4 crore are below the Rs 5 lakh per annum income bracket where a refund already exists. Budget 2022 will underscore the need for a stable tax system. It may even speak of a landmark decision to settle retroactive tax cases.

Additionally, the government could consider launching a mediation window before the tax demands are raised. In addition, tax compliance easing for exporters and industry is expected to be announced.

(Edited by : Anshul)

First post: STI