Income tax regime: If you had mistakenly filed ITR in the new tax regime in 2023 and were not able to avail tax exemption etc., then what are your options this year? Do you now have the freedom to avail tax exemption in the old tax regime?
Income Tax Regime: The time for tax planning has started. Soon you will have to provide investment proof for tax saving. From the point of view of tax calculation, it has to be seen how much tax is going to be levied on you. In such a situation, you can save tax for the next year by doing tax planning in advance. But you do not get most of the tax exemptions in the new tax regime. If you want to avail some tax exemption, then you will have to file Income Tax Return (ITR Filing) in the Old Tax Regime only.
What will happen if you have filed in the new tax regime?
But if you had mistakenly filed ITR in the new tax regime in 2023 and were not able to avail tax exemption etc., then what are your options this year? Do you now have the freedom to avail tax exemption in the old tax regime? Yes, you still have the option to avail tax exemption. You will have to switch the tax regime for this.
Can you switch tax regimes?
Yes, if you are a salaried professional then you can switch tax regime. This time the tax regime was also made the default regime, due to which taxpayers were confused about choosing their tax regime. And after bringing the new tax regime, there was confusion on whether the tax regime can be changed again and again?
On this, the Central Board of Direct Taxes (CBDT) had issued a circular on April 13, 2020, in which it was told that those having ‘business income’ i.e. taxpayers whose income comes from a business, will get this option only once. So that they can switch tax regime. So what does this mean? This means that those who do not earn income through business continue to have the option to switch tax regime. They can switch their regime every year.
What are the rules?
“With the new tax regime, there is a rule that those having business income get the opportunity to switch tax regime only once. They cannot change the tax regime in every new financial year. But On the contrary, salaried professionals and pensioners have the option to switch their tax regime every financial year.
That means, if you get a salary or are a pensioner and last year you paid tax in the new tax regime, then this year you can choose the old tax regime as per your convenience. After that you will have the option to choose a new tax regime next year. That means you can switch your tax regime (New Vs Old Tax regime) every year. All you have to do is that you have to first tell your company under which regime you will file taxes this year.
