'New Tax Regime Allows for Better Financial Planning'

Simplicity and higher returns in the new tax regime would compensate for the benefits in the older one, encouraging more people to migrate going forward, Sanjay Malhotra, revenue secretary, tells Parth Singh.

- Parth Singh

The fiscal deficit target was already an impressive 5.1% in the interim Budget and now we have this estimate of 4.9%.

The reduction is primarily due to the higher-than-budgeted dividend coming in from the RBI [Reserve Bank of India]. This has been the main contributing factor. Other revenues are increasing very marginally.

There are still some considerable benefits in the old tax regime. The older one seems more attractive when investing. So, is absolute migration possible?

Last year, we predicted that at least half would shift. Currently, the shift is on the higher end of our prediction. I think most people have calculated which regime is more beneficial to them from a tax payment point of view. Today, some may not switch to the new regime because they have already made investments.