Good news for Taxpayers! Taxpayers with income up to ₹ 20 lakh can get relief, government can bring new tax system

Budget 2023: The government may bring a new concessional tax regime in the upcoming general budget to provide additional benefits like standard deduction apart from creating a more coherent TDS framework to reduce the compliance burden from taxpayers. According to EY’s budget wish list, the government should give some relief to low and medium income taxpayers with annual income up to Rs 20 lakh in the matter of personal income tax.

Accordingly, in the budget to be presented in Parliament on February 1, Green Incentives such as Tax Exemption of interest from Green Bond and Capital Gain rates and holding period can be rationalized.

Government can offer TDS framework

With regard to Tax Deducted at Source (TDS), EY said that currently there are 31 sections under the Income Tax Act dealing with different types of payments made to residents, with rates of withholding tax ranging from 0.1 to 30. % Happens till then.

That said, the government may introduce a TDS framework to reduce the complexity and compliance burden for taxpayers. TDS procedures related to non-resident (NR) persons may be simplified. Accordingly, investment and production linked incentive plans (PLIs) can be considered for strategic sectors that enhance sustainability and energy efficiency.