Will govt phase out old tax regime? Here's what finance ministry says

Union finance minister Nirmala Sitharaman

Finance secretary Tuhin Kanta Pandey on February 1 said that nearly 75 percent of taxpayers have already moved to the new tax regime and the government expects everyone to shift soon.

When Moneycontrol asked during finance ministry's post-Budget briefing whether the government plans to phase out the old tax regime, finance secretary Pandey said that nearly three-fourth of the individual taxpayers have already moved to the new regime and the government expects the rest to make the shift soon.

Union finance minister Nirmala Sitharaman gave a push to consumption with the announcement of new tax slabs and benefits in Budget 2025, with a particular focus on the middle class. In a significant boost, Sitharaman announced no tax for salaried individuals up to a salary of Rs 12 lakh per annum.

The finance minister said under the new tax slabs an income up to Rs 4 lakh will have zero tax liability, income between Rs 4 lakh and Rs 8 lakh will be taxed at 5 percent, Rs 8 lakh and Rs 12 lakh at 10 percent, Rs 12 lakh and Rs 16 lakh at 15 percent, Rs 16 lakh and Rs 20 lakh at 20 percent and an individual with a salary between Rs 20 lakh and Rs 24 will have to shell out tax at a rate of 25 percent. Those earning Rs 24 lakh per annum or more will be taxed at a rate of 30 percent, the minister said during her Budget speech

Sitharaman said that the new tax slabs are being updated to make it more simple and progressive.