Here we discuss the new tax regime and do a full analysis of the merits and demerits of this new tax regime for individuals.
The merits of choosing the lower tax rates within the New Tax Regime could be summarized as follows:
1. The brand new income tax rate is useful for individuals with low investments in policy schemes.
2. The decreased tax rate would offer extra disposable income to the taxpayer.
3. It gives seven lower tax slabs the assessee has not to fear about complicated filings, therefore fewer errors in filing.
4. It’s a non-compulsory scheme so individuals have the flexibility to modify over from one system to another.
5. The exclusion of 70 exemptions additionally helps in containing income tax frauds.
Nevertheless, there is no such thing as a scheme/option where we are able to consider the other side. The demerits of the brand new regime could be mentioned as follows:
1. Salaried class individuals are not going to get a lot of profit in most of the cases as they are already eligible for some auto deduction e.g. Standard Deduction, career tax, PPF, and many others. without any extra funding.
2. The brand new income tax regime can probably decrease family financial savings and likewise have an effect on the long-run financial savings of a person.
3. The brand new income-tax structure might discourage investments in the real property sector being many incentives are associated with funding in the housing sector.
4. The insurance coverage sector may even endure because it must put extra effort and cash on commercials to draw individuals to invest.