I-T Authorities Claim That 5.5 Crore May Have Switched to the New Tax System

According to the revenue department’s first estimates, 5.5 crore people may have switched to the new tax system for the current physical year, which was revised in the budget. According to the senior government official who spoke to the Business Standard, most of these individuals have taxable incomes of up to Rs. 7 lakhs.

The administration modified the new tax system to make it more appealing in the budget for the financial year 2024, which was published in February. This is why the amount is noteworthy. After the new tax system’s implementation in the fiscal year 2020-2021, an assessable fraction of taxpayers have avoided it.

“

We can’t think of why 55 million people wouldn’t switch to the new tax structure.

Most young taxpayers, who make between Rs. 7.5 to 8 lakhs or even up to Rs. 10 lakhs, prefer flexible yet simple income tax filling,” the official said by the financial daily.

The precise number of people choosing the new tax system will be known in the following assessment year, 2024 to 2025, when earnings and tax liabilities for the previous fiscal year will be revealed.

According to data from the Income Tax Department for fiscal year 2023, 4.84 crore people had taxable income up to Rs. 5 lakhs. Forty-seven lakh taxpayers had taxable income between Rs. 10 lakhs to 20 lakhs, while more than 1.12 crore individuals had income between Rs. 50 lakhs to 10 lakhs

20 lakh taxpayers had taxable incomes between Rs. 20 lakhs and 50 lakhs, while 3.8 lakhs had incomes between Rs. 50 lakhs and Rs. 1 crore.

According to the data, 2.6 lakh filers had more than Rs. 1 crore taxable earnings.

Conclusion

The overall number of income tax returns (ITR) for the assessment year 2023 to 2024 filed up to July 31 for this year exceeded 6.77 crore, which is 16.1% more than the total number of ITRs for the assessment year 2022 to 2023 (5.83 crore) filed up until July 31 of this year.