Tax Exemption Only in New Regime, No Change in Old Regime: Union Budget 2024-2025

Kolkata, July 23 (IANS) Union Finance Minister Nirmala Sitharaman’s announcement of tax exemption only for those opting for the new tax regime will encourage more taxpayers to shift from the old to the new system in days to come, say economists and investment consultants.

According to Kolkata-based investment consultant Nilanjan Dey, the proposal is a revolutionary decision.

“This will force those currently in the old regime to shift to the new one and also encourage more individuals to be part of the Income Tax filing system,” Dey said.

According to him, since in the new regime standard deduction has been increased from Rs 50,000 to Rs 75,000, it will enable any individual in the new system to save more.

Professor of Economics, Probir Kumar Mukhopadhya said, “There might be apprehensions that many people will be discouraged from investing in tax saving instruments. I think such apprehensions are immaterial. Till now, the tax concession was an added rider. The purpose of investment is more for accumulating wealth rather than getting tax concessions.”

As regards bringing new individuals within the tax system, Mukhopadhyay said that it will be possible only if there is a focus on employment generation.

“Although the Union Finance Minister spoke extensively about employment generation it is to be seen how far such promises become fruitful,” he said.

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