Tax Reforms In Budget 2025 Should Help Bring In Majority Of Taxpayers To New Income Tax Regime, Says CBDT Chairman

Currently, about 74-75 per cent of taxpayers file their returns under the new income tax regime, the official said citing government data. 

The budget announced revised tax slabs under the new income tax regime and increased the tax rebate for income up to Rs 12 lakh per annum.

Source : ABPLIVE AI

CBDT Chairman, Ravi Agrawal, on Sunday said that revisions in the tax slabs should bring nearly all the individual taxpayers to the new income tax regime. Speaking in an interview with PTI, the Central Board of Direct Taxes executive said that the Budget 2025’s announcement of no tax on earnings up to Rs 12 lakh per annum should help the majority of taxpayers divert to the new regime, in comparison to about 75 per cent taxpayers who have adopted it currently.

Explaining the perspective behind the changes in the income tax slabs, Agrawal said that the government and the Income-Tax department hold a philosophy that ensures a non-intrusive tax administration in the country, ‘through an enhanced usage of Artificial (AI) apart from the regular human intelligence gathering mechanism’. 

The board executive said that the current processes available for a common taxpayer to report their income are not very complex, such as the simplified ITR-1, pre-filled Income Tax Returns, automatic computation of TDS, etc. He noted that the new tax regime allows individuals to submit their income tax returns (ITRs) without seeking professional assistance. The new regime doesn’t allow any deductions or exemptions, unlike the old tax regime.

The official agreed that there is always a scope for improvement and said, “It’s true across the spectrum, including where there are complex business structures. But by and large, I would say, for a common taxpayer, the things have been simplified to a great extent.”

Currently, about 74-75 per cent of taxpayers file their returns under the new income tax regime, the official said citing government data. 

Notably, the Union Budget 2025 was presented by FM Nirmala Sitharaman in the Parliament on Saturday. The budget announced revised tax slabs under the new income tax regime and increased the tax rebate for income up to Rs 12 lakh per annum.

“With the announcements made in the Budget vis-a-vis payment of income tax, more and more taxpayers would be prompted to opt for the NTR.If not 100 per cent of the taxpayers, at least going forward next year onwards, we should see figures in the 90s (90 per cent) or maybe more than that,” he added.