New tax regime splits aam aadmi down the middle

BHUBANESWAR: Finance minister Nirmala Sitharaman’s announcement of a new tax regime for the salaried class, and the reduction of tax rates for those who choose to enter the new regime after giving up existing exemptions, has evoked mixed reactions among the ‘aam aadmi’ here.
While some have welcomed the announcement, others said the coexistence of two different tax regimes for people with income up to Rs 15 lakh per annum would lead to confusion, and send people hunting for the nearest tax consultant.
According to the finance minister’s proposal, persons earning between Rs 5 lakh and Rs 7.5 lakh per annum will have to pay tax at 10 per cent, instead of the existing 20 per cent. Those with annual income between Rs 7.5 lakh and Rs 10 lakh will have to pay tax at 15 per cent as against last year’s 20 per cent.
People earning between Rs 10 lakh and Rs 12.5 lakh can pay tax at 20 per cent instead of 30 per cent, while those earning between Rs 12.5 lakh and Rs 15 lakh per annum will need to pay tax at 25 per cent. The tax rate remains unchanged at 30 per cent for those earning Rs 15 lakh and more.
Chartered accountant A K Sabat said taxpayers would now have to calculate to see which tax regime would serve them better. “I personally feel the older tax slabs were better,” he said.
Sabat was echoed by Manas Behera, a salaried man, who said two tax structures would confuse people. “The government should have reduced indirect taxes to tackle price rise,” he added. Another salaried person, Hemaprabha Das, however, said the tax announcement would help middle-class employees. “The reduction in tax rate will help us save money,” she said.
Some, like entrepreneur Tanaya Patnaik, said they were trying to understand the nuances of the announcement. “To be honest, I’m still going through the various segments of the Budget. It is a lot to process. I’m not sure how successful it will be in improving our economy,” she said.
Housewife Bandita Kar was more optimistic. She said the revision in personal income tax slab would help people save money, but added that the amount saved would not be enough to cover rising cost of essential commodities. “The budget does not have anything for senior citizens and women,” she pointed out.