New Tax Regime Encourages Compliance, Boosts Economy

The recent budget announcement of zero tax for earnings up to Rs 12 lakh and revised tax slabs aims to prompt over 90% of taxpayers to adopt the new tax regime. CBDT Chairman Ravi Agrawal highlighted simplified tax processes and increased use of technology to encourage compliance and broaden the tax base.

The Indian government's budget announcement of zero tax for annual incomes up to Rs 12 lakh is set to encourage a significant shift among taxpayers towards the new tax regime. According to CBDT Chairman Ravi Agrawal, more than 90% of taxpayers are expected to embrace the new system, up from the current 75%.

During an exclusive interview with PTI, Agrawal emphasized the push for a 'non-intrusive' tax administration by leveraging Artificial Intelligence alongside traditional methods. He noted that the simplified tax filing processes such as pre-filled returns and automatic TDS computation make it easier for individuals to file independently without professional help.

Finance Minister Nirmala Sitharaman's income tax cuts aim to provide substantial relief to the middle class, foster economic growth, and improve tax compliance. This initiative is part of a broader strategy to widen and deepen the tax base using technology and data analytics, creating a ripple effect of positive economic sentiment.

(With inputs from agencies.)