Views on Tax

by CA Mohit Khandelwal

Mohit Khandelwal is a qualified chartered accountant who is currently in practice and has his office in Jaipur. He has expertise in the field of finance and taxation and is able to provide insights and information on the subject matter. In the given context, he has discussed the changes in the slab rate for the current financial year and explained the difference between the old and new regimes of taxation. According to him, the government has introduced new regime with some changes in the slab rates, and a person earning up to seven lakhs and opting for the new regime can avail the benefits of section 87A of the Income Tax Act and save around 15,000 every year. He also mentions that every year individuals have to opt for either the old or new regime for paying taxes, but starting next financial year, once a person opts for a regime, they do not have to disclose it again.

Points Highlighted by Mohit Khandelwal

1. The speaker, Mohit Khandelwal, is a qualified chartered accountant currently in practice in Jaipur.

2. There have been changes in the tax slab structure this year but there is no change in the old regime.

3. The changes in the new regime include a rebate of up to 7 lakhs, with different tax rates for different income ranges (up to 3 lakhs exempt, 5% for 3-6 lakhs, 10% for 6-9 lakhs, 15% for 9-12 lakhs, 20% for 12-15 lakhs, and 30% for income above 15 lakhs).

4. The government is encouraging people to shift from the old regime to the new regime, where they are not allowed to invest in any tax-saving instruments.

5. The old regime includes exemptions for those earning up to 2.5 lakhs, 5% tax for those earning between 2.5-5 lakhs, 20% for those earning between 5-10 lakhs, and 30% for those earning above 10 lakhs.

6. The benefit of Section 87a can be availed by individuals who opt for the new regime, saving them around 15,000 every year.

7. Individuals have to choose between the old regime and new regime every financial year, but starting next year, they do not have to disclose their choice..

Mr. Mohit is speaking in response to a question about how the recent changes in the tax slab structure will affect homemakers and start-ups. The speaker mentions that there is a slight change in the slab rate this year, with changes only in the new regime and no changes in the old regime.

The speaker explains that the government has introduced the new regime to encourage people to shift from the old regime, where they are not allowed to invest in certain directions, to the new regime.

The speaker defines the old regime and the new regime, stating that under the old regime, if a person earns up to 2.5 lakhs, they are not required to pay any tax. If they earn between 2.5 to 5 lakhs, they are supposed to pay 5% tax, which comes to 12,500. But the government gives a rebate of 12,500 under Section 87a of the Income Tax Act, 1961. This means that if a person earns up to 5 lakhs, they are not required to pay any tax. If they earn between 5 to 10 lakhs, they are supposed to pay 20% tax, and if they earn more than 10 lakhs, they are supposed to pay 30% tax. Under the new regime, if a person earns up to 3 lakhs and opts for the new regime, they are exempt from tax. If they earn between 3 to 6 lakhs, they are supposed to pay 5% tax, if they earn between 6 to 9 lakhs, they are supposed to pay 10% tax, if they earn between 9 to 12 lakhs, they are supposed to pay 15% tax, if they earn between 12 to 15 lakhs, they are supposed to pay 20% tax, and if they earn above 15 lakhs, they are supposed to pay 30% tax.

The speaker mentions that if a person earns up to 7 lakhs and opts for the new regime, they will still get the benefit of Section 87a of the Income Tax Act, which means that they will save around 15,000.

The speaker concludes by stating that every year, individual salary persons have to opt whether they want to pay tax as per the old regime or the new regime, but from the next financial year, if they opt for the new regime, they do not have to disclose it.

Overall, the speaker provides a clear and comprehensive overview of the changes in the tax slab structure and how it affects different sections of society, including homemakers and start-ups.