Finance Bill, 2020 introduced one of biggest change ever in the Direct Tax History by providing different options of calculation of Income-tax for an Individual or HUF. The Bill got the President assent on March 27, 2020 and passed without any amendment regarding the rates and procedures to be applied in respect of the Personal Taxation.
First time, the option has been given to an individual that how he/she want to calculate the tax, whether after considering all the incentives/deductions or want to enjoy the benefit of lower tax rates by forgo them.
Revenue Secretary Ajay Bhushan Pandey said that “The finance ministry expects at least 80 per cent of the taxpayers to move to the new income tax regime”. He said the government did an analysis of 5.78 crore taxpayers before the budget and found that 69 per cent of them would save on tax payouts under the new system, while 11 per cent were found to be favoring the old regime. Of the remaining 20 per cent taxpayers, there will be people who want to avoid the hassle of paperwork and may wish to switch over to the new regime, he said.
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