Hey there! If you’re a salaried employee, there’s some important news for you. The government is considering major changes in the TDS (Tax Deducted at Source) rules, especially after introducing the new and old tax regimes. 📜
Why This Change?
The buzz is getting louder that the TDS deducted from employees’ salaries might be reduced. The goal? To make sure those opting for the new tax regime, aiming to reduce their tax liability, have less TDS deducted compared to those sticking with the old regime. 🤔
What’s New in the New Regime?
The 2024 budget made the new tax regime even more attractive. The standard deduction has been increased from ₹50,000 to ₹75,000. Tax rates in the new regime have also been lowered, and employers can now contribute 14% to the NPS (National Pension System). 📊
Interestingly, 72% of taxpayers who filed their ITRs this time chose the new tax regime. These individuals opted for lower tax rates, but their TDS is still being deducted based on the old regime. This has resulted in a bit of a financial loss for them. 💼
Current Situation: A Raw Deal for Employees
Some decisions related to the new regime were made on July 23, even though the financial year had started four months earlier. Companies had already collected regime options from employees in April and calculated their TDS based on the ₹50,000 standard deduction. As a result, TDS is being deducted from their salaries every month based on those calculations. This means employees are losing out on the benefits and their take-home pay is being reduced more than necessary. 😕
Why the Demand for Change?
Experts say that since the budget was presented in July, many employees might benefit more from the new regime than the old one. Therefore, employees should be given the option to choose their regime again. If they can save more tax under the new regime, their TDS should be reduced accordingly. This way, employees will have more money in hand to use as they see fit. 💡
Government Should Issue Guidelines to Companies
Experts also suggest that the government should issue guidelines to companies. Since the Finance Bill 2024 has introduced several changes, employees should be able to reap these benefits. Companies should be instructed to allow employees to switch regimes even in the middle of the financial year. Currently, most companies do not offer the option to change regimes mid-year. 📅
So, keep an eye out for these potential changes. If implemented, they could mean more money in your pocket every month! 💰
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