The government has raised the income tax exemption limit to Rs 7 lakh. The standard deduction for salaried individuals has been increased to Rs 75,000, and the exemption limit for family pensions has been raised to Rs 25,000.
Also, a comprehensive review of income tax regulations is underway to simplify and streamline the tax system.
According to Finance Minister Nirmala Sitharaman, within the next few months, there will be a new Tax Code or a new Income Tax Act aimed at reducing litigation.
The Tax Code will be simplified in line with the three goals set by Prime Minister Modi -- seamless, painless and faceless. The Finance minister also said that 72 per cent of all the taxpayers have moved to the new and simpler tax system.
As the number of income tax returns (ITRs) filed surged to a record 7.28 crore in the assessment year 2024-25, the processing time has also been reduced significantly in the last decade, which is a transformative shift in the tax assessment methodologies in the country.
According to Finance Minister Sitharaman, the average processing time of ITR has been reduced from 93 days in 2013 to 10 days now, thereby making refunds faster.
Meanwhile, the Union Cabinet, chaired by PM Modi, has approved the Unified Pension Scheme (UPS) for central government employees. This scheme will be effective from April 1, 2025. Under UPS, central government employees can choose between the Unified Pension Scheme (UPS) and the National Pension Scheme (NPS).
State governments will have the option of choosing between all three schemes, including the Old Pension Scheme (OPS).
Under the UPS, if a government employee retires after serving for 25 years, 50 per cent of his basic salary for the last 12 months will be given as a pension.
The special thing about this scheme is that it has provisions for an assured pension. If a government employee works for 10 years, at least a Rs 10,000 pension will be paid by the government with indexation benefits.
There is also a provision for family pension. If the employee dies after retirement, his family members will receive 60 per cent of his pension.
A lump sum amount (apart from gratuity) will also be given on retirement in UPS. It will be calculated as one-tenth of the basic salary and dearness allowance (DA) for every six months of service. More than 23 lakh Central government employees will benefit from this.
In the first 100 days of Modi 3.0, the government has also revised rank-wise pensions under the One Rank One Pension (OROP) scheme for retirees from the Army, Navy, Air Force and other defence units, as well as for family pensioners, effective July 1, 2024.
(IANS)
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