Two-tax regime is a bad idea: P Chidambaram

“ If you want to introduce a new tax regime, you should announce it well in advance and say that from this financial year on, everybody has to move to a new tax regime”,he said.

A two-tax regime is unacceptable and a bad idea. It will lead to tax arbitration, and people will be confused about whether to remain in the old regime or switch over to the new one,he said.

He said that the new tax regime is more complicated.he added,”If you can switch once and switch back, but if you switch for the second time, you can't switch back. I am thoroughly confused. I don't think they have given great incentives to switch over to the new tax regime in this budget”.

On the other question about long-term capital gains,Chidambaram said, “There's total confusion. They removed the second proviso to Section 48. But the third proviso refers to the second proviso.

As far as real estate is concerned, the indexation benefit has been removed, and any sale after July 23, 2024, will be without the benefit of indexation,Chidambaram said.

He added,nNow, a large number of people who have bought houses whose value has been appreciated will certainly suffer. But as I said, I would reserve my judgement on the effect of the tax changes.