NEW DELHI: The Centre expects up to 80% of tax assessees to move to the new flat rate regime as data analysed showed a very large number of assessees didn’t use the benefit of housing rent allowance (HRA) or the deductions allowed for investments . Of the nearly 5.8 crore assessees who filed returns for the last fiscal, 55.4 lakh had claimed HRA, which is roughly 9.5% of the base. Within this, around 43 lakh had annual HRA of under Rs 1 lakh. Around 42,000 assessees had said their annual HRA was over Rs 4 lakh, or more than Rs 33,500 a month.Under the new regime proposed in the Budget, allowances such as HRA and LTA will be added to the income and taxed. Currently, these allowances are not counted while calculating the taxable income. Individuals are also allowed claim a deduction for home loans if living in the property.The government has maintained the new tax regime, which offers lower rates due to reworked slabs, but without exemptions will benefit a large section of taxpayers. It has said taxpayers should work out calculations and decide if they want to move to the new system or stick to the existing one.On Sunday, the government had also said around 9% of taxpayers or 48 lakh availed of the Rs 2 lakh deduction for investments in provident fund, life or medical insurance. There were just around 3.8 lakh persons who had claimed exemptions of over Rs 4 lakh.Tax department officers said the government expected as many as 80% of tax assesses to shift to the new regime, after doing the calculations, as it made life simpler apart from lower rates. Officials said even those who may need to pay a marginally higher amount may be attracted by the lack of hassles in the flat rate.Government expects to take a hit of around Rs 40,000 crore based on this assumption. Officials have argued that a large number of taxpayers are not in a position to take advantage of all exemptions at the low levels of income. It was only the upper middle class and the rich who claimed the exemptions and that this segment will have the option to stick to the current regime.