Union Budget 2023: New Income Tax regime needs these slab & exemption changes – Times of India



Budget 2023 income tax: Finance Minister Nirmala Sitharaman should include certain long-term exemptions under the new income tax regime to make it more attractive for individual taxpayers, says Parizad Sirwalla of KPMG. In an interview with TOI, the Partner and Head, Global Mobility Services – Tax, KPMG in India listed out steps that Union Budget 2023 can take on for income tax slabs 2023-24.

Budget 2023: New Income Tax Regime Changes

Asked about the new income tax regime she notes, “The government has been pushing for more taxpayers to opt for it. But most of the popular exemptions, whether the standard deduction or the HRA, mediclaim payments or the housing loan interest, are done away with if you opt for the regime.”
According to Parizad, the government should not include all tax exemptions, but a few should find their way in the new income tax regime. “…maybe not all because it defeats the intention of the government to move towards a simplified personal tax regime with lower tax rates, but with a flat structure,” she said. “But maybe at least one or two exemptions could be retained, particularly the long-term ones, the mediclaim or housing loan interest, because they will lead to savings from an individual perspective,” she added.
Also Read | Budget 2023: Should women get special income tax slabs and tax benefits?
Additionally, she is of the view that the basic income tax exemption limit should be hiked. “Even under the new income tax regime, the government can look at taking it to Rs 5 lakh from Rs 2.5 lakh and also adjust the subsequent slabs accordingly,” Parizad told TOI.
Parizad extends the recommendation on basic exemption limit to the normal income tax regime as well. “People who are earning income less than Rs 5 lakh, technically by virtue of the rebate of Rs 12,500 and the Section 87A of the income tax, are not paying any taxes, but they still need to file the income tax return and show the rebate,” she explains.
Also Read | Budget 2023 income tax: Why FM should plug this Provident Fund double taxation possibility
“So if you get the basic exemption limit up to Rs 5 lakh, then from a compliance perspective, those many taxpayers fall out of the return filing base,” she adds.





Source link

Leave a Reply

Your email address will not be published. Required fields are marked *