The system will also compare the two schemes in an easy-to-understand format.
The income-tax (I-T) department is currently working on a system that will calculate the income tax under both the old and the new tax scheme based on the information shared by taxpayers.
This will be done to help them make an informed choice relating to which tax regime is more beneficial in terms of lower tax outgo, reported Business Standard.
“While filing income-tax returns (ITR), the system will automatically generate the total money taxpayers will save on both schemes, helping them choose the one most beneficial to them,” said a senior government official.
The move is slated to help the government achieve its target of making two-thirds, or 50-60 per cent, of taxpayers switch to the new regime in the next fiscal year.
The official quoted above also said that the system will improve its tax-filing mechanism. “Besides user interface, the overall experience of filing ITR will also be smooth,” he added.
The system will also compare the two schemes in an easy-to-understand format, said another source.
According to him, the department has invited suggestions from tax experts and stakeholders on ways to educate taxpayers on the benefits of the revamped new tax regime.
For the unversed, the Budget 2023 revamped the new tax regime for individuals by changing the I-T slabs, apart from raising the rebate from ₹5 lakh to ₹7 lakh under the new regime.
Besides this, the new tax regime will now be the default option unless a taxpayer selects the old regime.
Nearly 12.5 million taxpayers fall in the ₹5-7-lakh I-T slab — a cohort likely to move to the new regime, said the government official quoted earlier.
“To be ready by the middle of next year, the system may possibly try to capture the complete income profile of taxpayers to provide an accurate assessment,” he said.
According to data shared by the government in the Lok Sabha on February 13, there were over 41 million individual taxpayers who reported income of up to ₹5 lakh in assessment year (AY) 2021-22. There were also 14 million taxpayers who reported income between ₹5 lakh and ₹10 lakh, while the total returns filed in AY 2021-22 was over ₹6.3 crore.
These taxpayers will not have to pay any tax in AY 2024-25, provided their annual income is not above the ₹7 lakh limit.
Source: https://mintgenie.livemint.com/news/personal-finance/income-tax-portal-would-soon-indicate-which-tax-regime-is-better-says-report-151676524469182
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