Income Tax System: At present old tax regime and new tax regime are running in the country. Let us try to understand how and how many times they can be selected.
Income Tax System: There are currently two tax systems running in the country. First is the Old Tax Regime, which has been running for years. Second new tax regime, which was introduced by the central government in the 2020 budget. Taxpayers are being given the opportunity to choose any one of these regimes. However, the new tax regime has been made the default in the 2023 budget. Now, if you do not choose the old tax regime while paying tax, then your tax will be calculated according to the new tax regime. Currently, salary earners and business people will be given the opportunity to choose between the old and new tax regime every year. However, if you do not fall in either of these two categories, you will get this opportunity only once.
Finance Ministry tweeted
To curb the rumors spreading regarding two tax regimes, the Finance Ministry also made a tweet at 11.59 pm on March 31. In this, the Finance Ministry said that avoid wrong and misleading information related to the new tax regime. No new changes are being brought for taxpayers from April 1, 2024. The last date for submission of investment and expenditure documents for the financial year 2023-24 was March 31.
What is the difference between the two tax regimes
In the old tax regime, you get about 70 types of deductions and exemptions. Apart from this, under Section 80C, you can also avail tax exemption of up to Rs 1.5 lakh in income tax. In the new tax regime, you do not get the benefit of many big tax exemptions including HRA, LTA, Section 80C. Now this tax system has been made the default. But, you can make changes in it every year. You can even make any changes like one year old, next year new and then old tax system. The Finance Ministry has given complete freedom to salary earners and business people in this matter. If you do not fall in either of these categories then choose wisely because you will not get a second chance.
Self employed will be able to choose tax regime once
If you are self-employed, you will be able to switch to the old tax regime only once. Such taxpayers will also have to fill Form 10-IE along with the Income Tax Return. If he fails to do so, he will not be able to opt for the old tax system that year. You have to submit Form 10 IE before filing the return. After filling this form, you will be given a 15 digit acknowledgment number. They will have to provide this number while filing ITR. The Central Board of Direct Taxes (CBDT) also launched two new income tax return forms ITR 1 (SAHAJ) and ITR 4 (SUGAM). In ITR 1 form you got the option to choose tax regime.
