Comparative study of Income Tax Regimes and Salaried Taxpayers in India

Abstract

Government of India (GOI) has announced a new tax regime in the Budget 2020 with the aim to provide an alternative method of computing income tax for individual taxpayers by eliminating deductions and exemptions available under the old tax regime. To make the new tax regime attractive among taxpayers, GOI is changing the income tax slabs and providing additional relief by allowing certain deductions under new tax regime in every budget. While New Tax Regime has a lower tax slabs, Old Tax Regime contains lots of deductions and exemptions available under the different heads. This paper aims to provide comparison between both tax regimes which will help individual taxpayers to choose the right tax regime. Also this paper has highlighted the tax awareness among the taxpayers and further provide suggestions to policymakers to make the new tax regime more attractive and beneficial.