Do this important work today, otherwise you may have to pay more Income Tax

ITR FILING: The new financial year has begun, and along with it the efforts of the employed people to save income tax have also begun. The most important task at the beginning of every new financial year is Choosing the Income Tax Regime and submitting the Investment Declaration accordingly. This is a matter of a few minutes, but it can save you thousands of rupees.

Big change from this financial year

From this year, under the new income tax regime, income up to Rs 4 lakh will be exempt from income tax. If your taxable income is less than Rs 12 lakh, then the income tax levied on you will also be zero.

Which system is better for you?

If you do not invest much in different schemes, then the new income tax system can be a better option for you. The reason for this is that under the new income tax system, the tax levied in the tax slabs is less than the old system. However, if you invest in various tax saving investment options (such as PPF, NPS, LIC, etc.), the old tax regime may be more beneficial for you as it allows you to avail tax exemptions on these investments.

Investment declaration from company HR

The HR departments of almost all companies have started sending emails to their employees for investment declaration. In this email, you have to choose between the old and new tax system. If you choose the old tax system, then you will also have to tell how much you are planning to invest in which schemes this year. Income tax deduction on your salary will be done on the basis of this information.

Choose your tax regime on time

It is important that you choose your tax regime before the last date given by HR. If you fail to do so, the new tax regime will be considered active by default. If you have opted for the old tax regime but have not submitted the investment declaration, you may have to pay a hefty tax. So keep in mind the deadlines and provide the correct information.

What to do if you make a mistake?

If you have mistakenly opted for the old tax regime and more tax has been deducted from your salary, then there is nothing to worry about. While filing Income Tax Return (ITR), you can choose the new Income Tax regime and file your ITR. Any additional tax deducted will be refunded to you.