New tax regime to old tax regime: How to choose old income tax regime when filing ITR for FY2023-24 This change is because the new tax system will be the automatic choice for the fiscal year 2023-24
Current income tax laws allow taxpayers to opt for either the old or new tax regimes for salary tax deductions. This choice applies throughout the fiscal year.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} From April 1, 2023, if an individual taxpayer hasn't chosen the old tax system, their employer will deduct tax from their salary based on the new tax system. This is because the new tax system is now the default option starting from the fiscal year 2023-24. The interim budget for 2024 hasn't made any changes to the income tax rules. Therefore, for the current fiscal year 2024-25, the new tax system will continue to be the default option.
Also read: New income tax regime: All your questions answered
For which individuals' new tax regime will be the default regime?
For individuals, Hindu Undivided Families (HUF), AOP (other than co-operative society), BOI and Artificial Juridical Person, as per the Income Tax Department’s website.How to opt for old tax regime when filing ITR
It is possible to switch while submitting the ITR (a checkbox for an old or new regime must be chosen) and a statement in form 10IE to designate the regime.According to the Income Tax website, “If you want to opt for "OLD TAX REGIME " and you are: Eligible to file return of income in ITR 1 & 2 then select relevant option directly in ITR and file return within the applicable due date. Eligible to file return of income in ITR 3, 4 & 5 then you MUST file Form 10-IEA before the due date mentioned u/s 139(1). Please compare the tax liability under the New Tax and Old Tax regime before filing of the return. For computing tax liability please click on the link 'Income Tax Calculator'. The notified ITR forms asks the individual "Do you wish to exercise the option u/s 115BAC(6) of opting out of new tax regime? (default is No)".
The income tax return form will determine the amount of income tax due based on the new tax regime's slabs if the option "No" is chosen. Selecting "Yes" indicates to the income tax department that the person wishes the old tax system. In this scenario, the income tax due will be computed using the income tax slabs from the old tax regime.
Income tax regime: How many times can you switch
An individual can switch between the new and old tax regimes annually. It's important to note that this option is available exclusively to individuals with salaried income and no business income. Those with business income are not eligible for this switching facility.Also read: How many times can you switch between new tax regime and old tax regime?
If you want to use the old tax system when filing your ITR, make sure to file your ITR on or before the due date. If you file your ITR late, the new tax system will be used to calculate your income tax.
Old tax regime – things to note
A person may make use of a number of tax exemptions and income deductions under the old tax system. The most often used tax exemptions and deductions are Sections 80C and 80D for specific investments and expenses, Section 80D for health insurance premiums paid or senior citizen medical bills, Section 80CCD (1B) for investments in the National Pension System (NPS), House Rent Allowance (HRA) for rent paid during the fiscal year, and Leave Travel Allowance (LTA).Note that employers will start deducting tax on salary (TDS) based on the new tax system on April 1, 2023, assuming an individual taxpayer has not chosen to use the old tax regime.
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This story originally appeared on: India Times - Author:Faqs of Insurances
