Because the new tax regime is the default tax regime, submitting revenue tax return (ITR) below the previous regime would require you to modify from the brand new tax regime. Nonetheless, earlier than you try this — it’s crucial to pay attention to sure key guidelines which govern the change.
Notably, the foundations close to switching of tax regime rely on the supply of revenue of taxpayers: wage or enterprise/ career.
Which tax regime to decide on?
Taxpayers can file tax return below the old tax regime in the event that they imagine that this may result in some quantity of tax saving. Alternatively, if submitting tax return below the brand new tax regime is worthwhile then naturally, one would go for the default regime.
What guidelines apply to salaried workers?
Salaried taxpayers can switch the tax regime from old to new and vice versa yearly.
There isn’t a restriction on salaried workers close to switching between the 2 tax regimes as they will do it yearly. Nonetheless, the identical flexibility shouldn’t be obtainable for individuals who’ve enterprise revenue.
In case you have enterprise or skilled revenue, what guidelines apply?
The revenue tax web site says that a person with enterprise or skilled revenue gained’t be eligible to decide on between the 2 tax regimes annually.
So, after they decide out of recent tax regime, they may have just one likelihood to modify to new regime. And as soon as they change again to the brand new regime, they gained’t be capable to select previous tax regime anytime in future.
And the selection of previous tax regime may be made previous to the due date of submitting the return below part 139(1) of I T Act.
If you happen to opted for the previous tax regime final yr, will the brand new tax regime nonetheless be default regime?
The brand new tax regime has been the default regime for previous two years. Any motion within the earlier years close to selecting of regime won’t be relevant this time. Taxpayers are purported to go for the previous regime.
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