66% of Taxpayers Opt for New ITR Regime This Season: CBDT Chairman

CBDT Chairman Ravi Agrawal announced on Wednesday that approximately 66% of taxpayers, out of over 4 crore filers, have chosen the new income tax return (ITR) filing regime for the current season. In an interview with PTI following the Budget announcement, Agrawal highlighted the government’s focus on “simplification” in tax processes, including ITR filing and interactions with the Income Tax Department.

Agrawal emphasized that simplifying tax procedures aims to enhance compliance, noting that the number of ITR filings this year has already surpassed last year’s figures. The milestone of 4 crore ITRs was reached on July 22 this year, compared to July 25 last year.

The CBDT Chairman reported strong adoption of the new tax regime, with 66% of filings under this system as of now. He anticipates further growth in the uptake of the new regime.

The total number of ITRs filed last season reached 7.5 crore by the deadline on July 31. The current ITR filing season for the assessment year 2024-25 will also conclude on July 31 for taxpayers whose accounts are not subject to audit.

Agrawal noted that the new regime’s introduction includes automatic reporting of more transactions to taxpayers, which is expected to increase compliance. The government is also incentivizing the new regime by adjusting tax slabs, offering taxpayers additional benefits.

Regarding the potential phase-out of the old tax regime, Agrawal indicated that the process is still in transition. A decision will be made based on the relative acceptability of the new regime among taxpayers.

Finance Minister Nirmala Sitharaman’s recent Budget proposals included raising the standard deduction for salaried individuals to Rs 75,000 from Rs 25,000 and revising the tax rate structure under the new regime. These changes could result in savings of up to Rs 17,500 for salaried employees opting for the new system.