New Delhi, Feb 2 (PTI) – The recent Budget announcement offering zero tax liability for individuals earning up to ₹12 lakh per year, along with revised tax slabs, is expected to push over 90% of taxpayers towards the new tax regime (NTR), up from the current 75%, said Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal on Sunday.
In an exclusive post-Budget interview with PTI, Agrawal emphasized the government’s commitment to a “non-intrusive” tax administration, leveraging Artificial Intelligence (AI) alongside traditional data-gathering methods.
The new tax regime (NTR), which eliminates deductions and exemptions, offers straightforward calculations, making self-filing easier.
"If not 100% of taxpayers, at least by next year, we should see adoption figures in the 90s or even higher," he stated.
Currently, around 74-75% of individual taxpayers have switched to the new regime.
"When the economy grows, tax revenues also grow, creating a positive cycle," he added.
On expanding and deepening the tax base, he detailed how the I-T Department uses AI, electronic data sources, and human intelligence to track taxable transactions.
"We are making data available to taxpayers, prompting them to comply voluntarily," he explained.
"Rather than heavy scrutiny, we are encouraging self-correction," he said, stressing the shift towards a proactive and data-driven compliance approach.
"Wherever we find malpractice, we act swiftly," he asserted.
As the new tax regime becomes more attractive, India’s taxation system is set to become simpler and more efficient, benefiting both taxpayers and the economy.
In an exclusive post-Budget interview with PTI, Agrawal emphasized the government’s commitment to a “non-intrusive” tax administration, leveraging Artificial Intelligence (AI) alongside traditional data-gathering methods.
Simplification of Tax Compliance
Agrawal highlighted that tax filing has become increasingly simplified for the common taxpayer. With tools like pre-filled Income Tax Returns (ITRs), automatic Tax Deducted at Source (TDS) computation, and streamlined ITR-1 forms, the need for professional assistance has significantly reduced.The new tax regime (NTR), which eliminates deductions and exemptions, offers straightforward calculations, making self-filing easier.
Key Budget Announcements
Finance Minister Nirmala Sitharaman, in her Budget speech on Saturday, announced major tax relief for the middle class:- No tax for individuals earning up to ₹12 lakh per year (up from the previous ₹7 lakh exemption limit).
- An additional ₹75,000 standard deduction for salaried individuals.
- Revised tax slabs to help those earning up to ₹25 lakh per annum save up to ₹1.1 lakh in taxes.
Growing Adoption of the New Tax Regime
With these measures, Agrawal expects a sharp rise in adoption of the NTR."If not 100% of taxpayers, at least by next year, we should see adoption figures in the 90s or even higher," he stated.
Currently, around 74-75% of individual taxpayers have switched to the new regime.
Boosting Economic Growth and Compliance
Agrawal noted that these tax cuts will stimulate economic growth by increasing disposable income, leading to higher consumption and investment."When the economy grows, tax revenues also grow, creating a positive cycle," he added.
On expanding and deepening the tax base, he detailed how the I-T Department uses AI, electronic data sources, and human intelligence to track taxable transactions.
"We are making data available to taxpayers, prompting them to comply voluntarily," he explained.
Crackdown on Tax Evasion
Agrawal also revealed that last year:- 90,000 taxpayers who had claimed bogus deductions filed revised returns, contributing ₹1,000 crore in additional tax.
- 90 lakh people filed updated ITRs (ITR-U), adding ₹8,500 crore in government revenue.
"Rather than heavy scrutiny, we are encouraging self-correction," he said, stressing the shift towards a proactive and data-driven compliance approach.
Targeting Tax Fraud
In cases where advisory groups mislead taxpayers into claiming false deductions, Agrawal confirmed that enforcement actions, including search and survey operations, have been undertaken."Wherever we find malpractice, we act swiftly," he asserted.
Conclusion
The Budget 2024 tax reforms mark a major relief for the middle class while streamlining compliance. With AI-driven oversight and a self-correction approach, the CBDT aims to broaden and deepen the tax base, ensuring higher voluntary compliance.As the new tax regime becomes more attractive, India’s taxation system is set to become simpler and more efficient, benefiting both taxpayers and the economy.
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