New Income Tax Bill: There is no change in the existing rules related to the new tax regime in the Income Tax Bill 2025. The previously chosen tax regime will remain in force and the taxpayer will not need to choose it again. Taxpayers with business income can make the change only once, while salaried taxpayers can switch between the old and new tax regime every year.
New Income Tax Bill 2025: Finance Minister Nirmala Sitharaman introduced the Income Tax Bill in Parliament on 13 February. After the introduction of this bill, many taxpayers must be wondering whether after the implementation of the New Income Tax Bill, they will have to choose between the new and old tax regime again or the previously chosen option will be applicable. So let us tell you that taxpayers who have already chosen the new tax regime under the Income-Tax Act 1961 will not need to choose it again in the Income Tax Bill 2025. The existing rules related to tax system selection in the new bill will continue as before. In this regard, the Central Board of Direct Taxes (CBDT) has confirmed that the transition from the old law to the new bill will be done smoothly and all the existing rules related to income tax return filing will remain in force.
New tax regime in Income Tax Bill 2025
The new Income Tax Bill does not make any policy changes related to the New Tax Regime. Rather, the CBDT has taken measures to simplify the provisions of the New Tax Regime, so that it is easier to understand. The bill includes a separate section on special tax rates for individual taxpayers, domestic companies, cooperatives and other eligible taxpayers. Apart from this, unnecessary provisions have been removed, the terms and conditions have been presented more clearly through tables and various types of income eligible for special rates have been adjusted in one place.
Current rules for choosing old or new tax regime
Currently, taxpayers can choose either the Old Tax Regime or the New Tax Regime. Each tax system has its own advantages and disadvantages and taxpayers can choose one of them according to their situation. However, there are some specific rules for choosing a tax regime:
Taxpayers with income from business or profession cannot change tax regime from year to year. Once they exit the new tax system, they can return to it only once. But once they return to the new tax system, they cannot go back to the old tax system again.
Taxpayers with non-business income (such as salaried employees) can switch between the new and old tax systems every year. However, the decision to switch to the old tax system must be taken before the last date of filing income returns.
