Speaking at the 165th anniversary of the Income Tax Department on Wednesday, August 21, the Finance Minister emphasised the ease of the new system, pointing out its lack of exemptions and associated complications.
“In the two years since the implementation of the new regime, we have seen 72 per cent of taxpayers switching to it. The new regime has been accepted as a very well thought out and simplified regime,” Sitharaman said.
The Finance Minister added, “It is an option and a choice. We are not forcing people. Direct taxation in India is about understanding the needs of taxpayers. We are just giving a nudge to taxpayers, not forcing them.”
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At the event, Sitharaman also congratulated Indian taxpayers for their important role in supporting the country’s economy and highlighted a net addition of 58.57 lakh taxpayers for the first time this year.
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Record 7.28 crore income tax returns (ITR) were filed for fiscal year 2024-25 by the July 31, 2024, deadline. This marks a 7.5% increase compared to the 6.77 million ITRs filed by the same date in the previous year, fiscal year 2023-24.
He praised the efforts of tax officials and acknowledged the challenges they faced over the past decade in achieving record income tax collections.
“The last 10 years have been very challenging and the performance of the CBDT is appreciable,” he said.
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The Finance Minister also asked tax officials to use simpler words in notices or letters sent to taxpayers, exercising the power conferred on them prudently.
“The communication you use must demonstrate that you are communicating with the taxpayer for a particular reason and your version of events must be crystal clear.”
#FlashNews The new tax regime has been accepted as a very well thought-out and simplified regime. It is an option and a choice, says the Minister of Finance @nsitharaman image.twitter.com/4160oiuIWX
— CNBC-TV18 (@CNBCTV18Live) August 21, 2024
The Finance Minister also hinted at upcoming reforms, revealing that parts of the Tax Code would be simplified within six months.
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