Budget 2020 - Individuals can switch tax regime every year
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However, business owners won’t have this option. “Let it be very clearly noted that this is an optional scheme — there’s no compulsion for you to go to the new scheme,” he said at an event on Tuesday. “If you find the new scheme preferable, you can move to it. If you’re better off in the old system, then you can continue.”
FM Sitharaman announced new slabs in the February 1 budget.
“Further, this option (of switching) is available to you on a year-on-year basis—that’s a very interesting proposition,” Mody said. “If I feel availing a certain deduction this particular year, my old set-up is better, I opt for that. But if a new regime offers me a better rate, I can opt for it.”
“The only restriction would be in case of a person with a business,” said Mody.
The chairman said deductions and exemptions will be gradually phased out to make the tax structure simpler and easier to comply with, reiterating a point Sitharaman had made.
The government is also planning to provide prefilled income tax returns forms for easing the process of filing returns, in line with its push toward seamless service and ease of compliance.
Widening the tax base to include more of the unorganised sector offers a chance for tweaking or even lowering tax rates. “An equal portion (of potential taxpayers) in the unorganised sector which is going untouched… they ought to be in the tax framework,” Mody said. “I think there’s a case in the future to further lower taxes. Broader the base, a better case there would be more tweaking of the income tax rates also.”
The government will seek to convince potential taxpayers that they will not be unnecessarily harassed, which will be crucial to bringing them on board. Sitharaman had said CBDT will adopt a taxpayer charter to ensure harassment is eliminated. #casansaar (Source - Economic Times)
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