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Tax Authorities: Approximately 55 million individuals might have chosen the new income tax regime

A senior government official noted that a considerable number of these taxpayers earn up to Rs. 7 lakhs. In the 2023-24 Budget, the government implemented substantial adjustments to the new tax structure to enhance its appeal.

Krishna Gopal Varshney

An editor at Myitronline

Apr 30, 2024
5 min read
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Tax Authorities: Approximately 55 million individuals might have chosen the new income tax regime

Roughly 55 million individuals who are taxpayers might have opted for the new tax regulations for the current fiscal year, based on early assessments by the revenue department, as reported in Business Standard.

The fresh system offers a reduced tax rate but eliminates specific tax deductions and exemptions. Nevertheless, it encountered difficulties in gaining popularity since its introduction during the 2020-21 fiscal year.

"We don't foresee a reason why 55 million individuals wouldn't transition to the new tax structure. Many younger taxpayers, with earnings around Rs. 7.5-8 lakh, or even up to Rs. 10 lakhs, find the idea of income tax filing being flexible yet uncomplicated quite appealing," the official stated.

Based on the I-T department's information for FY23, there were 48.4 million taxpayers with a taxable income up to Rs. 5 lakhs, more than 11.2 million with a taxable income ranging from Rs. 5 lakhs to Rs. 10 lakhs, and around 4.7 million with a taxable income between Rs. 10 lakhs & Rs. 20 lakhs.

Around 2 million individuals belonged to the income group of Rs. 20 lakhs to Rs. 50 lakh, while 380,000 earned between Rs. 50 lakh and Rs. 1 crore. There were only 260,000 taxpayers in the category of income above Rs. 1 crore.

The number of income tax returns (ITRs) filed reached a record high of 67.7 million in Assessment Year 2023-24, which is 16% more than the total ITRs filed (58.3 crores) the previous year.

By the end of Fiscal Year 2023, the total number of tax filings was 78 million. This fiscal year is also expected to see an increase in tax filings. The department reported receiving nearly 5.37 million ITRs from first-time filers.

Also Read: Understanding Section 269ss and Section 269t of the Income Tax Act, 1961

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Krishna Gopal Varshney

An editor at Myitronlinenews

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