Income Tax: There are currently two income tax regimes in India. But Revenue Secretary in the Finance Ministry, Sanjay Malhotra, has said that there should be only one income tax regime in the country. He said that 70 percent of the taxpayers who are filing income tax returns for the assessment year 2024-25 have filed income tax returns under the new income tax regime.
Addressing the post budget session at the business chamber PHD House of Commerce and Industry, Sanjay Malhotra said, currently there is Old Income Tax Regime and New Income Tax Regime in the country. But there should be only one Income Tax Regime in the country. Finance Minister Nirmala Sitharaman, while presenting the budget on July 23, has announced the review of the Income Tax Act 1961, which will be completed in six months. The Revenue Secretary said, the review of the Income Tax Act is a huge task because this act is of 1600 pages. Reviewing this act is a big challenge.
Defending the decision to increase capital gains tax, Sanjay Malhotra said, we studied 10.5 lakh returns in 2022-23 in which capital gains were earned from land and building. He said that the effective long term capital gain tax rate on real estate in 2022-23 was 11.54 percent which is less than the income tax levied on salary. In such a situation, there has been a slight increase in the long term capital gain tax of real estate.
In the budget for the financial year 2024-25, the indexation benefit has been abolished for calculating the long term capital gain tax on the sale of property. But the long term capital gain tax on the sale of property has been reduced from 20 per cent to 12.50 per cent, similar to equity. In such a situation, it is believed that the tax burden on the sellers may increase on the sale of property. The government argues that it wants to eliminate the difference in long term capital gain tax in real estate and other asset classes, but users from the street to Parliament and on social media are expressing their displeasure over this decision to the government.
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