As per the report published in BQ PrimeThis is a big change from the current system, where the old tax system is the default system, and the new system has to be specially selected.

The importance of this step is hidden in human nature, because it is a proven fact that it is difficult for people to make choices other than the existing system. Usually people do not take any step to make a choice, and the default option becomes the natural choice. After this minor change, more taxpayers will definitely choose the new tax regime.

To ensure the choice of the new tax regime, it has been made attractive, for which several steps have been taken.

Standard Deduction
Salaried class, and people getting pension and family pension get the benefit of standard deduction in the old tax regime. The good news is that now this is the only deduction, which will also be given in the new tax regime. So, now such an exemption will be available in the new tax system as well, which is deducted from the taxable income.

change in slabs
The existing slabs in the new tax regime are in the block of 2.5-2.5 lakhs, so, 5% on income from 2.5 lakhs to 5 lakhs, 10% on the next 2.5 lakhs block and so on for the block of 2.5-2.5 lakhs Taxes apply. Now these blocks have been revised to 3 lakh blocks each, so, 5% block is now on income of 3 to 6 lakh, 10% block is on income of 6 to 9 lakh, and so forth Similarly.

Tax liability has also come down considerably. For example, a non-salaried taxpayer taking a total exemption of Rs 2 lakh on an income of Rs 10 lakh has been paying income tax of Rs 72,500 (before adding education cess) till now, whereas he is now paying tax under the new slabs in the new tax regime. Accordingly, only Rs 60,000 (before adding education cess) will have to be paid as income tax.

Discount
Rebate is available under section 87A of the Income Tax Act, in which your tax liability is reduced if your income is below a certain limit. The current limit in the old tax regime is Rs 5 lakh, which has been increased to Rs 7 lakh in the new tax regime. This means that now income tax will not have to be paid even on a higher income than before.

surcharge
In the new tax system, the tax liability of the nobles will also be less, because the maximum rate of surcharge has been reduced from 37 percent to 25 percent. In the old tax regime, 37 per cent surcharge was levied on those earning more than Rs 2 crore. With this new step, the maximum tax rate in the new tax regime will be 39 per cent (after adding cess).