Context:
Much ink has been spilled by now on the Budget’s hike in the tax-free ceiling under the new income tax system introduced in 2020, to ₹7 lakh from ₹5 lakh, with lower tax rates for those who give up existing tax exemptions.
Experts Concerns on take away of the old tax regime:
Why is the old tax regime required?
The old exemption-based regime helps guide families towards some level of prudent asset allocation to cope with life’s uncertainties, with a leg-up for building a critical asset over their working lives — a roof over their head.
Conclusion:
The nudge away from the old tax regime must be accompanied by greater financial literacy efforts from the government and regulators and a crackdown on unethical selling practices that could lead to people ending up in penury.
News Source: The Hindu
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June 5, 2023