New Tax Regime: Under the new income tax regime, taxpayers will now have to pay less tax, as well as no tax will have to be paid on annual income up to Rs 7 lakh under the new tax regime. This will save taxpayers, so they will be able to save for a longer period or can spend the remaining tax amount on meeting their needs as per the need.
Those earning more than Rs 7 lakh are in trouble!
However, taxpayers whose income is a little more than Rs 7 lakh will not be able to get the benefit of tax rebate of Rs 25,000. Under the new income tax regime, if a taxpayer’s annual income is Rs 7,01,000, then the benefit of tax rebate of Rs 25,000 will not be available and such taxpayers will have to pay tax of Rs 25,100 and Rs 26,140 including cess. That is, taxpayers will have to pay tax of Rs 26,140 if there is an additional income of only Rs 1,000 above Rs 7 lakh.
tax hit on taxpayers
Suppose if a person’s annual income is Rs 7,29,000, then he will have to pay tax of Rs 29,016. That is, the income that is more than Rs 7 lakh will go towards paying tax. That is, any taxpayer whose income is between Rs 7 lakh to Rs 7,29,000 is going to be hit hard by tax. In such a situation, these taxpayers have only one option that they refuse to take whatever income is more than Rs 7 lakh, only then they will get the benefit of not paying any tax on income up to Rs 7 lakh under the new tax regime.
Government should remove discrepancy
However, tax experts believe that this discrepancy should be removed by giving some relief to these taxpayers, such as the increase in surcharge is given to taxpayers. According to Ved Jain, former president of ICAI, under this marginal relief, if a taxpayer has an annual income of Rs 7,01,000, then he should be asked to pay tax of only Rs 1,000. If the annual income of a taxpayer is Rs 7,10,000 per annum, then only Rs 10,000 tax should be levied on it. By giving this facility, taxpayers will declare their correct income. Otherwise, taxpayers with annual income from Rs 7 lakh to Rs 7,29,000 will declare their income by reducing it so that they can avoid paying tax.
read this also
Layoffs in Startups: Indian startups raised $1.2 billion in January, yet more than 2,000 jobs were created
