The Finance Minister of India says that the new tax regime effective from the financial year 2023-24 will benefit the middle class. However, the choice is left to the tax payer. The tax payer has to exercise option this time if he wishes to remain under the old tax regime failing which he will come under the new tax regime by default. The common tax payer depends on newspapers for information which is very limited particularly with regard to certain existing deductions and exemptions owing to which he is at at a loss to decide which of the two tax structures is beneficial to him. For example, although standard deduction of Rs 50,000 is now available in both tax regimes, a number of deductions and exemptions are denied in the new system. There is no clarity on exactly which deductions are not available and which are admissible in the new regime. The government should clarify the admissibility of different deductions and exemptions and also provide a ready reckoner so that the common tax payers can examine which of the two regimes is beneficial to them.
