New Delhi. Finance Minister Nirmala Sitharaman will present the first budget (Budget 2024) of the Modi 3.0 government in the third week of July. The public has a lot of expectations from this budget, especially the taxpayers. Experts believe that there may be some changes in the New Tax Regime. Especially in the matter of giving relief like deduction or exemption.

But, there seems to be very little scope for any change in the Old Tax Regime. Experts also believe that the government can keep the tax slab as it is and it is not going to bring any new change in the old tax regime. In such a situation, the question arises whether the government is considering abolishing the old tax regime?

Why two tax regimes?

Finance Minister Nirmala Sitharaman introduced the new tax regime in the Union Budget 2023. Its aim was to reduce the confusion related to tax. It applies to common people along with companies. The government has also made this the default option for taxpayers. This means that if you do not choose either of the new or the old tax regime, your tax will be deducted under the new tax system.

This shows that the government is focusing more on the new tax system and somewhere in its mind it also has the idea of ​​abolishing the old tax regime.

Talking about the old tax regime and the new tax regime, the biggest difference between the two is deductions and exemptions. If we talk about the old tax regime, then in this the taxpayer gets the opportunity to take advantage of deductions and tax exemptions in about 70 ways. They can also reduce their tax liability significantly by making various types of investments.

On the other hand, if we talk about the new tax regime, then the tax rate in it is much lower than the old system. However, in this, like the old tax regime, you cannot reduce your tax liability through investment or other means. You just get a standard deduction of Rs 50,000 from salary and Rs 15,000 from family pension.

Confusion due to two tax systems

The tax system is already quite complicated and two tax regimes increase the confusion of taxpayers even more. Many new taxpayers are not even able to understand which tax system will be better according to them. The purpose of the government to bring a new tax regime (Income Tax Computation) is to reduce the confusion of taxpayers. In such a situation, it does not make sense to have two tax regimes.

If there is only one tax regime, then many problems of taxpayers will automatically end. They will also be able to pay their taxes more easily.

When will the old regime end?

The government has made the new tax regime the default option. Its focus is also more on this. In such a situation, people are speculating that the government may soon abolish the old tax regime. Some people are even expecting this to happen in Budget 2024.

But according to experts, this is not possible right now. At least not in Budget 2024. The government will wait for a large part of taxpayers, i.e. about 70-80 percent of people, to adopt the new tax regime, only then will it scrap the old tax system.

Will there be a change in tax slab?

PM Narendra Modi, while addressing NDA MPs on June 7, had said, "The middle class is the driver of the country's development and their well-being and convenience is our priority. We will make policies in the direction of how the middle class can save some money and how their life can be made easier."

This indicates that the government may give some relief to the middle class on the tax front in the budget. But it is not certain whether that relief will be linked to the change in the tax slab. It will also be interesting to see whether the government gives any relief, it will be in the old tax regime or in the new tax regime.