The Finance Ministry expects at least 80 percent of taxpayers to adopt the new income tax regime. Apart from this, Revenue Secretary Ajay Bhushan Pandey said this on Friday. The new tax category was proposed in the Budget for the year 2020-21. But by adopting this, taxpayers may have to give up the benefit of housing loan interest, existing exemptions, and deductions including other tax saving schemes. Pandey said, "We believe that at least 80 percent of people will adopt new ones." Apart from this, he said that the government had analyzed 5.78 crore taxpayers before the budget and found that 69 percent of the people would save by adopting the new system, while 11 percent are those who like the old system.

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Among the remaining 20 percent of taxpayers, there will be some people who want to avoid paperwork and wish to adopt the new system. Apart from this, Pandey said that he was given a similar option when the company tax was cut in September and 90 percent of the companies adopted the exempted system for lower tax. He said, 'Most people will find the new tax system beneficial. Apart from this, the government has proposed a new tax system in the budget. Along with this, in this new system of personal income tax, at the rate of 5 percent on an income of Rs 2.5 lakh to 5 lakh, 10 percent on 5 to 7.5 lakh rupees, 15 percent on 7.50 to 10 lakh rupees, 10 lakh to 12.5 lakh rupees. It is proposed to impose tax at the rate of 20 percent on income of Rs. 25 percent on an income of Rs. 12.5 to 15 lakh and 30 percent on income above Rs. 15 lakh.

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The same new tax regime is optional and taxpayers can choose any of the old or new systems. Apart from this, provisions like standard deduction of Rs 50,000 in the current income tax regime and rebate on investment up to Rs 1.5 lakh in various savings schemes including LIC premium, provident fund under Section 80C of Income Tax Act are applicable. The same is taxed at the rate of 5 percent, 20 percent and 30 percent on different income levels. Those whose income is up to Rs 5 lakh in the old and new system will not have to pay any tax.

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