The personal income tax exemption is $1,040 this year and is projected to rise to $1,090 in 1986 as a result of indexation of tax brackets to inflation. The figure listed in a story yesterday was incorrect.

President Reagan's tax-simplification plan, which he is to send to Congress within two weeks, backs away from the Treasury Department's original proposal in such key areas as oil tax breaks, business depreciation, capital gains, charitable contributions and employe fringe benefits.

The changes were made to appease powerful lobby groups, but proponents of tax revision worry that unplugging loopholes in the name of politics might sink the whole package.

"A lot of people say 'Treasury I' was too academic and too pristine," said Joseph J. Minarik of the Urban Institute. "I think you may be better off starting with something too academic and too pristine than starting out with something dirty that has to be cleaned up."

The Treasury Department's November proposal deleted a host of deductions and credits to provide money to pay for lowering personal and corporate tax rates. Donald T. Regan, then treasury secretary, said the plan would be altered before it was endorsed by Reagan, but it was not clear then how widespread the changes would be.

The new version, still subject to change at the White House, would restore two-thirds of the benefits to the oil and gas industry. Companies would be able to write off investments in a more beneficial way, although the change would not be as generous as current law.

Rather than taxing capital gains as if they were ordinary income, the new plan would permit some gains, less than under current law, to be excluded from taxation. The investment tax credit would be repealed, as it was in the original proposal, but a corporate minimum tax probably will be added.

Treasury officials also decided to retain the provision repealing the deduction of state and local income taxes. But they answered strong lobbying by charitable organizations by dropping a plan to disallow any charitable contributions of less than 2 percent of income.

The personal exemption probably will be raised from $1,400 to $1,800 instead of $2,000, sources say. And if the top personal income tax rate is below the 35 percent in the first plan, it will be only by a point or so.

Gone in the new plan are such controversial proposals as taxing the increase in value of a whole-life insurance policy and taxing numerous employe fringe benefits. Instead of taxing all health insurance premiums in excess of $70 per month for an individual and $175 for a family, the new plan will tax the first $25 per month or so.

Treasury officials point out that despite the changes, the new version would reduce rates drastically and do away with many deductions, credits and exclusions. Changes were made on merit as well as for political reasons, they say.

Nor do the costs of compromise necessarily hurt the chances for sweeping tax overhaul. Powerful special-interest lobbies have been mobilizing to fight provisions of the first proposal in such areas as fringe benefits, charitable contributions and capital gains.

However, compromise may leave a bitter taste in the mouths of some who favor simplifying the tax code. The liberal lobby groups that liked the first treasury plan are losing interest, for example.

"If all they do is hand us a plan that's a bunch of reshuffled tax breaks, the genius of Treasury I is lost," said Joseph Goffman of Public Citizen's Congress Watch.

If those relatively small groups drop off the pro-revision side of the ledger, it probably will not have much effect on the outcome of the battle. The broader issue, simplification proponents say, is what the restoration of oil-and-gas tax preferences, among others, tells other lobby groups.

"I don't think it helps you," said Rep. Richard A. Gephardt (D-Mo.), sponsor of another overhaul bill. "If there are too many of those situations and people feel it is a Christmas tree, you spoil the coalition that is for tax reform."

Congressional sources and some lower-level officials in the Treasury Department say they worry that treasury is compromising before it needs to. Concessions made before the proposal is submitted to Congress are unlikely to be reversed after the legislative process begins.

"At this point, we're probably going to be working off the treasury proposal" in bill-drafting, which is to begin in the fall after hearings over the summer, said Rep. Byron L. Dorgan (D-N.D.). "When treasury backs off one of its initiatives, it's going to be very difficult to restore it."

"I think people are nervous they are backing away from what was a pretty idealized income tax system in the first plan to a kind of hybrid system that, when Congress gets through with it . . . , will just be some arbitrary changes here and there," said John Makin of the American Enterprise Institute.