Personal Taxes

The federal government could make the brand new simplified revenue tax regime extra engaging

The government is aiming to make the new simplified income tax system more attractive to the income class, sources informed CNBC-TV18.

The government is considering tweaking the new tax system to encourage taxpayer adoption. Also, the standard deduction and interest on home loans are expected to be reduced, sources said, giving away other exemptions. Discussions are even underway about further relief for individual taxpayers,” sources added.

Here are the suggestions that are being considered:

1. Increase in the existing standard deduction limit

2. Increase in health insurance premium window

3. Simplification of capital gains tax rules

However, a final decision has not yet been made. Direct tax proposals can be closed after January 20th.

It is important to note that out of over 6 million taxpayers, 4 million are below the Rs 5 lakh a year income bracket where a refund is already in place. The 2022 budget will emphasize the need for a stable tax system. It may even be a landmark decision to resolve retrospective tax cases.

In addition, the government could consider opening an arbitration window before tax claims are made. In addition, relief in tax compliance for exporters and industry is likely to be announced.

(Edited by: Anshul)

Initial Release: Jan 18, 2022 1:28 PM IST

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