New tax structure gives option to save tax: Revenue Secretary

The new lower income tax rates offered in the Budget 2020-21 will leave more cash in the hands of those who do not wish to make compulsory investments to save tax, Revenue Secretary Ajay Bhushan Pandey said.

In an interview, he said the Budget gives an option to individuals to migrate to a new regime by foregoing their existing exemptions and deductions for a lower tax rate.

"We are not saying which one is beneficial, which one is not beneficial. We have provided an option. We have not put restrictions on anyone. This proposal can only benefit somebody and not harm anybody," he said.

"So, in this whole proposal, not a single person will be loser."

He said taxpayers have an option to stay with the current regime of getting a standard deduction of Rs 50,000 and investing Rs 1.5 lakh in saving schemes and pay 5 per cent, 10 per cent or 30 per cent tax depending on income levels.

Alternatively, they can migrate to the new regime and pay lower tax rates without having to invest in any instrument to claim exemption, he said.

In the new regime, 5 per cent tax is levied on an annual income between Rs 2.5 lakh and Rs 5 lakh. The tax rate rises to 10 per cent, 15, per cent, 20 per cent and 25 per cent for every Rs 2.5 lakh addition. A 30 per cent tax is charged for income over Rs 15 lakh.

"Because the proposal is that we will continue the old scheme and if you find the new scheme attractive, you come or else you don't come. Therefore, there is no scope of confusion or worry," he said.

(Agencies)