Nirmala Sitharaman Confirms No Tax Rate Cuts for Old Regime
Finance Minister Nirmala Sitharaman has stated definitively that there will be no reductions in tax rates under the old tax regime, despite ongoing calls from taxpayers for equitable cuts across both tax systems.
During a recent event hosted by News18, Sitharaman emphasized that the government is not mandating a transition from the old regime to the new one. "We are not forcing anyone to make the change," she said, noting that over 78% of taxpayers have opted to shift to the new regime. This new system was designed to simplify direct taxation and improve compliance for individuals, offering lower tax rates and an increased standard deduction of ₹75,000 aimed at alleviating the tax burden on the middle class.
While acknowledging concerns from some middle-class taxpayers regarding the lack of similar tax rate reductions in the old regime, Sitharaman reiterated the government’s stance. "I understand the desire for comparable reductions under the old regime, but the changes have been made exclusive to the new scheme," she affirmed.
The Finance Minister highlighted the government’s ongoing commitment to streamlining the tax process, particularly for middle-income earners. Since 2019, the government has worked to simplify the tax landscape, which led to the introduction of the new regime with its lower rates. “Taxpayers have the choice to remain in the old scheme if they prefer to retain exemptions,” she noted.
Initially, the new tax structure did not include exemptions, but in response to taxpayer feedback, a standard deduction was later introduced. Sitharaman mentioned, “In the Union Budget presented in July, we revisited this matter, further reducing rates for the middle class while also enhancing the standard deduction.”
