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Government Contemplates Adjustments as Taxpayers Shift to Concessional Regime Stalls Government sources, speaking on condition of anonymity, reveal that any further shift of taxpayers to the concessional personal income tax regime might necessitate additional tweaks for increased attractiveness. Options under consideration include a potential increase in the threshold for the highest Personal Income Tax (PIT) rate or a reduction in the marginal rate, with implications for significant tax savi
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FAQ :
The government is considering adjustments because the number of taxpayers shifting to the new concessional regime has stalled, suggesting it may not be attractive enough.
Options being considered include increasing the income threshold for the highest Personal Income Tax (PIT) rate or reducing the marginal rate itself, potentially to 25%.
Analysis suggests that raising the threshold to Rs 20,00,000 could benefit low-income taxpayers more in relative terms, while significant savings are possible for those earning above Rs 25,00,000.
The new tax regime offers lower rates but means taxpayers lose access to various deductions that are available under the old regime.
Tax experts suggest that significant policy changes are generally avoided in interim budgets, especially before general elections, so major amendments might be deferred to a full budget later in the year.
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