rewrite this title and make it good for SEOOld tax regime to stay, but why would anyone want it now: CBDT chairman

New Delhi: The proposed new income tax law will be “user-friendly” and easy to comprehend, without redundant provisions of the six-decade old Act, said Central Board of Direct Taxes (CBDT) chairman Ravi Agrawal. In an interview to ET on Sunday, a day after finance minister Nirmala Sitharaman announced the new legislation in her budget speech, he also said that the proposed crypto asset reporting provision had been introduced to lay the groundwork in line with India’s commitment at international fora. He said the old tax regime would continue but the focus would be to nudge taxpayers towards the new tax regime, which offers significant concessions with the new changes proposed in the budget.”We would be interested to know who would want to remain in the old regime and why? About 74% people have already opted for the new regime and with these tax slabs, why would a taxpayer want to be in the old engine?” Agrawal said, pointing out that the choice, however, would be available.

The finance minister on Saturday offered significant relief to the middle class, announcing that individuals earning up to ₹12 lakh per year will not have to pay any taxes, raising the exemption threshold from ₹7 lakh at present. She also announced a rejig in tax slabs.

On the revenue impact of the concessions in personal income tax, the CBDT chairman said the projected revenue growth had been kept at 12.36%, lower than 15% in the current financial year, keeping in view the changes proposed in the tax slabs, but exuded confidence about meeting the target with better governance and administrative framework.The cornerstone of the government’s approach is “trust first”, he said, adding that in view of this the period to amend returns is proposed to be doubled to four years.”This is part of non-intrusive tax administration. There is no scrutiny that is happening. You get the information, I flag the information to you and you say, let me pay the tax and finish it off,” Agrawal said.

It is in the same spirit, he said, that the government is building on the concept of safe harbour for different segments. Asked about concerns over the high rates under safe harbour, he said, “We will consider those as and when the issues are flagged.”

On the new tax law”The idea was to take a holistic view of the provisions and then write the new law in a language that is simple,” Agrawal said. He made it clear that tax treatment of incomes would not undergo a change in the proposed law but there would be some changes in the future once rules are amended in line with new provisions and sections in the new law.

“Basically, the present schema of the Act, by and large, that would remain.”

He said the apex direct taxes body had looked at the global best practices including in the UK and Australia as part of the exercise, besides seeking feedback from people.

The current law, he said, had become a sort of patchwork with redundancies and complexities creeping with multiple amendments over the past years.

Sitharaman said her budget speech that the new law would be introduced in Parliament this week.

Crypto assets reportingAgrawal said the measure had been introduced as India has an international commitment to report from 2027 when automatic exchange of information would begin. “For that framework to be able to actually start exchange two years down, you have to have that ground work in place,” he said, adding that rules and reporting agencies would be notified later.