If people with business income are switching back to the old tax regime, then they can avail this option only if they have never switched back before.
There is nothing special for the taxpayers in this time’s budget of the Central Government i.e. 2023-24. The new tax regime has now become the default regime for tax payers. However, many tax benefits have not yet been included in the new tax regime.
In such a situation, there are a large number of taxpayers who want to file income tax returns under the earlier i.e. old tax regime.
For whom will the old tax regime be beneficial?
If a taxpayer has filed his ITR under the new tax regime this year as compared to the last financial year, but this time he has increased investment or has taken a home loan, then to avail exemption on these, such taxpayers will have to go under the old tax regime. ITR has to be filed in. For this you can switch your tax regime.
What does the rule say
The new tax regime was made the default in Budget-2023. That is, if a tax payer does not choose his own tax regime, then his tax will automatically be calculated under the new tax regime. But you can switch your tax regime before the due date of filing ITR.
Salaried employees can change their tax regime every financial year as per their convenience, whereas those having business income, i.e. taxpayers whose income comes from a business, will have the option to switch the tax regime only once.
How to change your tax regime, know step by step process
1- Choose tax regime
First of all, you have to calculate which regime is giving you more benefits. In the new tax regime, you will get a lower tax rate, but most of the deductions and exemptions will not be available. Whereas if you choose the old tax regime, then the tax rates are high, but here you get tax exemption on many types of investments, expenses and other things.
2- Check eligibility
1. Salaried employees do not need to fill a separate form to switch the regime, while filling their ITR form, they can first tell in which regime they are filing the return.
2. If you do business, you can switch the tax regime only once and for this you will have to fill Form 10IE before 31st July of the assessment year.
3- How to choose tax regime?
Salaried employee will have to follow these steps-
- Open the ITR form.
- It is asked at the top of the form which regime you are choosing.
- Choose the regimen as per your choice here
- Now fill your ITR, verify it and submit it.
Follow these steps to get business income-
- Download and fill online Form 10IE
- Fill before 31st July of assessment year
- Now fill ITR by choosing the tax regime as per your choice.
If someone with business income is switching back to the old tax regime, then he can avail this option only if he has never switched back before. Along with this, they cannot take tax exemption under the old regime in the current year’s return.
Fill your ITR carefully and submit it only after checking. Keep in mind that the last date for filing income tax returns for FY 2023-24 (AY 2024-25) is July 31, 2024.
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