Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal said that around 95-97 per cent of the taxpayers would join the new tax regime from the current 74-75 per cent. He said currently there are 8-8.5 crore taxpayers.Â
Speaking to Business Today TV, Agarwal said, “A straight computation of income tax is available in the new tax regime with reduced rates. About 74 per cent of the people have already adopted the new tax regime. I am sure that with this change that has been brought out in this amendment in the finance bill, more people would be prompted to join the NTR. We have about 8-8.5 crore individual taxpayers and out of that 75 per cent have already opted. So going forward I see the figure touching somewhere around 95-97 per cent,” he said.Â
Agarwal statement came after Finance Minister Nirmala Sitharaman, in the Union Budget 2025, announced zero tax for earnings up to Rs 12 lakh.
Giving similar figures to news agency PTI, Agarwal said that the motivation behind the rejig of the tax slabs was to provide substantial relief to the middle class.Â
Agarwal said that such changes bring in positive sentiment in the economy and that propels growth. “So, basically once that growth happens, the people consume, and expenditure happens and then the economy grows, and when the economy grows, it again comes back in some form through taxes. So, basically, it is an integrated sort of exercise,” he explained.
The CBDT chief highlighted a strategic shift towards a ‘non-intrusive’ tax administration, noting that current systems, such as simplified ITR-1 forms and pre-filled returns, are not ‘very complex.’ The new tax regime (NTR) further facilitates ease in tax filing by removing deductions and exemptions, encouraging individuals to manage their taxes independently.Â
The board is actively using technology to ‘widen and deepen’ the tax base. The use of ‘data analytics’ helps in informing taxpayers about potential discrepancies, prompting them to correct their filings, he said. This approach has led to 90,000 individuals revising their returns and contributing Rs 1,000 crore in taxes, while about 90 lakh people filed updated returns, adding Rs 8,500 crore to government revenues.Â
FM NIRMALA SITHARAMAN’S NTR
FM Nirmala Sitharaman, in Budget 2025 said that there would be no income tax up to an income of Rs 12 lakh. “The middle class provide strengths to the economy. In recognition of their contribution, we have periodically reduced the tax burdens. I am now happy to announce that there will be no income tax up to an income of Rs 12 lakhs,” she said.Â
The new tax slabs as mentioned by the finance minister are as follows:Â
Zero to Rs 4,00,000 – No tax
Rs 4,00,000 to Rs 8,00,000 – 5%
Rs 8,00,0001 to Rs 12,00,000 – 10%
Rs 12,00,001 to Rs 16 lakh –15%
Rs 16,00,001 to Rs 20 lakh – 20%
Rs 20,00,001 to Rs 24 lakh – 25%
Above Rs 24 lakh – 30%
An additional Rs 75,000 standard deduction is also available for the salaried class.