May 15, 2023
Marginal relief: Marginal relief is a tax provision that provides relief to individuals whose income falls within a certain income bracket where the tax liability is higher due to progressive tax rates. This is to ensure that sudden tax increases above income thresholds do not disproportionately affect individuals. Marginal relief reduces the additional tax burden on people belonging to certain income levels.
New tax system vs. old tax system: Many countries offer multiple tax systems, including the new tax system and the old tax system. The specifics of these schemes can vary, but they usually include differences in tax rates, deductions, exemptions and other tax benefits.
The purpose of a new tax system is usually to simplify the tax system by introducing lower tax rates and eliminating or reducing various deductions and exemptions. It aims to provide a simpler and more streamlined approach to calculating income tax. However, those choosing the new tax system may have fewer opportunities to save taxes through deductions and exemptions.
The old tax system usually maintains the current tax structure with multiple tax slabs, deductions and exemptions. It offers private individuals more opportunities to reduce their tax liability by taking advantage of various tax incentives provided by law.