The Income Tax department is considering putting up a calculator to help taxpayers decide whether the old regime is beneficial for them or they would be better off opting the new one. Nitin Gupta, Chairman of the Central Board of Direct Taxes (CBDT) shared the thinking of the department on this front in an interview with businessline. Excerpts:


Since the opting out facility for new or old Income Tax regime is only at the time of filing, one thinking is that in case tax outgo is going up in one or two particular slabs after switching regimes, and then there is an additional tax liability, taxpayers will be required to pay penal interest. What do you have to say?

The situation which you are referring to may not arise because the taxpayer is aware of his income and he is also aware whether he is going to take benefits of the old regime. Accordingly, he can make a rough calculation and decide the regime. We will look at existing return forms. We have just come out with the proposal, so to iron out such possibilities, we may think of even advancing the opting mechanism at earlier stage as well.

All these are at formative stage. Suggestions from stakeholders are welcome and we will consider those also. We would like to put up a calculator which will help a person know if I take X amount of exemption or deduction, what would be beneficial — the old or new regime. It would be a sort of facilitator. We don’t want to penalise the taxpayer, it has never been the intent.


Normally, employee informs employer about investments and savings in advance and accordingly, the tax is calculated and deducted in instalments or even at one go. Will this mechanism change?

Till date, the position has been that people were content with the old regime. They never thought of shifting to the new regime. So, the proposed regime is a sweetened one. Let the suggestions come. We will work upon it and try to ease problems of taxpayers.


Under the ‘new tax collected at source’ provisions for remittances on education loans, the problem is that there are living expenses and others over and above the tuition fee. Will these also be considered part of education?

As of now, provisions exist with 0.5 per cent for remittance out of education loan and 5 per cent for education (not through loan) and medical treatment — even in these cases, some mechanism was followed by taxpayers while remitting the money. Now even if there is anything which could be challenging, please write to us. It is a new development which has been proposed and we would like to see that genuine concerns are addressed.


The angel tax issue for start-up refuses to die down despite clarification that the DPIIT-recognised start-ups are not to be covered. Your thoughts?

There is already a provision in the Act. Whatever is covered, is covered. There have been concerns... some have talked about a threshold of ₹25 crore, some are talking about investment already made, etc. New dimensions are coming into play, we will again examine. But one thing I am certain, the purpose of providing any carve-out is not to grant any round-tripping, so one should be careful about it. Misuse of benefit is not permitted.


The Jawaharlal Nehru Memorial Fund, Indira Gandhi Memorial Trust and Rajiv Gandhi Foundation have been excluded from the list of eligible funds for claiming deductions in respect of contribution/ donation under Section 80G. They are doing same things which the other institutions in the list are doing...

Let them do, we are not against them. They are under section 12A regime and through that they can seek 80G deduction. Actually, when the name is there in the list under 80G, it means an automatic provision of deduction. Now they must have been registered under section 12A — there the deduction is available at 50 per cent slab and not 100 per cent. So, this change does not affect materially.