Income Tax: There is a new update for income taxpayers. One financial year has passed, and now the process of filing ITR has begun. After the introduction of the new tax system under section 115BAC, taxpayers are now left with two options: the New Tax Regime and the Old Tax Regime. In this, deductions and exemptions are available in the old tax regime, while there are no deductions in the new regime, but the tax rate is lower.
There is always a discussion about which tax system is better for taxpayers, but there is also a discussion about whether the tax regime can be changed while filling out the ITR form.
Can the tax regime change?
Whether you can change your income tax regime or not depends on the category of taxpayer you belong to. There are two categories of taxpayers: first, salaried or pensioners, and second, business or professional. Salaried people or pensioners can change their tax regime every year while filing ITR. You may have told your company any tax regime for TDS, but you can change it according to your convenience while filing the return. For example, if you have chosen the new tax system with your company, but later you find the old tax system more beneficial after calculating all the deductions, then you can choose the old tax system while filing ITR.
On the other hand, taxpayers with income from business or profession can change the tax system only once. If they have chosen the new tax system, then they can return to the old tax system only once in their life, and then they will not be able to return to the new tax system until their business/professional income stops.
How to choose between the new and old tax systems?
While filing ITR, the tax software or utility will ask a question about whether you want to opt for the new tax regime under section 115BAC. Select ‘Yes’ if you want to opt for the new tax regime, or select ‘No’ to stick with the old regime. If you opt for the new tax regime and have business income, you will have to file Form 10-IEA before filing ITR from assessment year 2024-25.
