Finance Minister Nirmala Sitharaman’s new income tax regime that offers lower rates to individuals who give up exemptions and deductions could benefit non-salaried taxpayers more than their salaried counterparts. That’s because such taxpayers enjoy fewer exemptions.
Also Read: Analysing Budget 2020’s Tax Targets
Benefits Accrue To A Few
While the scenarios considered by BloombergQuint suggest that non-salaried individuals would benefit from the new tax regime at income levels of Rs 10 lakh and above, the number of such taxpayers is very low.
Data released by the Central Board of Direct Taxes in October 2019 for the assessment year 2018-19 listed the number of individual taxpayers with business income who filed returns at 8.7 lakh. That’s less than 2 percent of the total number of individual taxpayers who filed returns. As many as 1.9 crore individual taxpayers earning business income reported annual income of less than Rs 5 lakh.
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