New Income Tax Act hasn't simplified tax: CA Prakash Hegde

Over the past few years, two big shifts have changed how Indians plan their taxes: the introduction of the new tax regime and the changes in capital gains taxation.

- Shipra Singh

Unless exemptions and deductions exceed ₹7.75 lakh annually, the new regime makes far more sense, says Hegde..

At the Mint Money Festival, chartered accountant Prakash Hegde of Acer Tax and Corporate Services broke down what these changes mean for small taxpayers and why simplification remains elusive.

Old versus new tax regime

For most salaried taxpayers, the new regime is now the straightforward choice, according to Hegde. “Unless your exemptions and deductions exceed roughly ₹7.75 lakh annually, the new regime makes far more sense.”

He highlighted additional perks of a higher standard deduction of ₹75,000 (versus ₹50,000 in the old regime), a more generous National Pension System (NPS) contribution exemption and surcharge rates of 25% instead of 37% for those with incomes of above ₹5 crore. While some continue with old regime to maximise deductions like house rent allowance and under Section 80C, the simplicity of the new regime outweighs the effort of tax-saving investments.

Capital gains: a knotty affair