Union Finance Minister Nirmala Sitharaman announced that 72% of taxpayers have transitioned to the new tax regime, which she described as simpler and more advantageous.
Simplicity of the New Tax Regime
Speaking at the 165th anniversary of the Income Tax Department on Wednesday, August 21, Sitharaman emphasised the ease of the new system, highlighting its lack of exemptions and the complications often associated with the older regime. She noted that within two years of its introduction, a significant majority of taxpayers have made the switch.
Taxpayer Transition to the New Regime
“Within two years of bringing in the new regime, we have seen 72% of taxpayers shifting to it. The new regime has been accepted as a very well thought through and simplified regime,” Sitharaman stated.
Emphasizing Choice and Flexibility
The Finance Minister reiterated that the transition to the new tax regime is entirely optional. “It is an option and a choice. We are not compelling people. India’s direct taxation is understanding the requirements of the taxpayers. We are just making a nudge to the taxpayers and not compelling them,” she said.
Acknowledging Taxpayer Contributions
At the event, Sitharaman also took the opportunity to congratulate Indian taxpayers for their significant role in supporting the country’s economy. She highlighted a net addition of 58.57 lakh first-time tax filers this year, demonstrating the growing compliance and participation of citizens in the tax system.
Record Income Tax Returns Filed
A record 7.28 crore Income Tax Returns (ITRs) were filed for the assessment year (AY) 2024-25 by the deadline of July 31, 2024. This marks a 7.5% increase compared to the 6.77 crore ITRs filed by the same date in the previous year, AY 2023-24, showcasing a positive trend in tax compliance.
