Budget 2023 | Thrust is for everybody to move to new tax regime, says Dhruva Advisors

The government has lowered income tax rates and introduced revised slabs for salaried individuals. As part of its Budget 2023 announcement, Finance Minister Nirmala Sitharaman said that the tax rebate has been extended on income up to Rs 7 lakh in the new tax regime, as against Rs 5 lakh. Also, the new tax regime will become the default one, she added.

Earlier in February 2020, the government introduced the ‘New Tax Regime'. With this, individuals currently have the choice of paying tax under the new slab with lower rates but foregoing deductions or continuing to pay tax under the existing tax laws and claiming the applicable exemptions.

Speaking in an interview with CNBC-TV18, Dinesh Kanabar, CEO of Dhruva Advisors said the clear thrust is to move to the new tax regime. It has not been a success thus far.

“I had said that there is a need to go up on the exemption limit, which I am glad has gone from Rs 2.5 lakh to Rs 3 lakh. Also said that the maximum marginal rate needs to come down and that has also come down partially, 42 to 39, which is very welcome. But I think the clear thrust is for everybody to move to the new tax regime. It has not been a success thus far,  but with this, there will be no option at all but for people to go there” he said.