What Sop?

With the Budget around the corner, taxpayers are hoping that the government will offer them some sops and clear any lingering confusion over choosing between the two tax regimes

- NAVNEET DUBEY

SHIVAM confronts a dilemma every year. The 28-year-old private sector employee gets stressed making the annual choice between the two taxation regimes for individuals in India-the old, which allows deductions for investments and some other expenses, and the new regime introduced in April 2020, which does not allow such deductions but has lower rates.

"Every year, figuring out which one will save me more money on taxes is a guessing game," he says. "Now, with these new choices, I cannot make decisions, and it's preventing me from making any investments at all, directly impacting my finances." Many like him have demanded that the government ensure parity between the two regimes. They want the comforts of the old, with its many deductions, but with the lower slab rates of the new. And they're pinning their hopes on the upcoming Union Budget for the full year 2024-25-an Interim Budget was presented earlier this year ahead of the General Elections according to convention.

The National Democratic Alliance government is back in the saddle. Union Finance Minister Nirmala Sitharaman has retained her portfolio, and she is set to present a record seventh Budget.

But despite the continuity, experts expect tweaks considering the changed composition of the Lok Sabha, with the Bharatiya Janata Party falling below the majority mark of 272 seats and depending on coalition partners to make up the numbers.

They believe the government will likely retain both regimes, but it might make changes to and observe which one gains momentum over time. As of the past year, only 15% of taxpayers had shifted to the new regime, according to tax services portal Clear Tax.

SLAB DABBLE