New Tax Regime Update: The government has made some changes regarding the new tax regime. The government wants more and more people to adopt this system. In such a situation, it is important to understand the change.
The government is continuously taking measures to make the new tax regime attractive. In this episode, the new tax system has been made default. This change is going to affect such taxpayers, who are salaried. Such taxpayers (Salaried Taxpayers) can now find it costly to delay in choosing their preferred option from the two existing options of the tax system. Let us know how and also how it can be avoided…
Department will accept silence as yes
First of all, let us tell you what it means to make the new tax regime the default… This means that if you do not tell your employer about the tax regime of your choice, then you will have the option of a new tax regime. It will decide by itself. Simply put, it means that if you are a salaried person, your silence will be accepted by the Income Tax Department as yes for the new tax regime.
More TDS can be deducted
In fact, the Central Board of Direct Taxes (CBDT) asked the employers to ask the employees whether they want to remain in the new or old tax regime. According to the tax regime, the tax on salary will be calculated and the employer will pay tax at source. Deduction means TDS will be deducted. You have already known that from the financial year 2023-24 i.e. assessment year 2024-25, the new tax regime has been made the default option. In such a situation, if you do not choose the option according to your calculation, then TDS will be deducted from your salary according to the new tax regime.
This is the last chance for taxpayers
One good thing here is that the government has also given a second chance to the taxpayers. Let us assume that the old regime is beneficial for you and if you do not choose your preferred tax regime at the beginning of the financial year itself, then in such a case TDS will be deducted more from your salary. When you start filing income tax return, then you will have a chance to choose the preferred option again. If TDS is deducted more than your tax liability, then you can claim its refund. However, do keep in mind here that there is no chance to change the option once the ITR is filed.
Know such beneficial options
The Income Tax Department wants you to choose your preferred tax regime at the beginning of the year and pay taxes accordingly. In the case of salaried taxpayers, the old tax regime provides benefits of close to 70 exemptions and deductions, including HRA, 80C, 80D and section 24 (b), which are not in the new regime. However, the tax rates have been kept low in the new system. You can know which is better for you in the new or old tax regime, with the help of the calculator given on the website of the Income Tax Department…
These changes in the new tax regime
Let us tell you that the new tax system was introduced in the year 2020. To make the new system attractive, several steps have been taken in the budget for the financial year 2023-24. First, in the new tax regime, no tax will be levied on income up to Rs 7 lakh. Apart from this, the number of slabs has been reduced from 6 to 5 in the new system. The income tax exemption limit has been increased from Rs 2.5 lakh to Rs 3 lakh. Standard deduction has also been made a part of it. However, even after this, for many taxpayers, the old option is a profitable deal.
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