Top News

Filing ITR is an important process for a common salaried taxpayer every year. But when it comes to choosing a tax regime, many people have a question whether the tax regime can be changed while filing ITR, even if the employer has deducted tax under some other option?

So the answer is yes, you can change the tax regime while filing ITR, whether your employer has deducted TDS under the old regime or under the new regime. Let us know what the difference is between these two regimes.

What is the difference between the old and new tax regimes?

The government has implemented two types of tax regimes since 2020: old and new. In the old tax regime, the tax rates are slightly higher, but in this regime, you can take advantage of many exemptions and deductions. Like HRA, LTA, Section 80C (LIC, PF, etc.), 80D (Medical Insurance), 80CCD, etc. While the new tax system has lower tax slab rates, most of the exemptions and deductions are not available in it. This system can be beneficial for those who do not invest much and want to pay less tax directly.

Can the previously chosen tax regime be changed?

When you are in a job, the employer takes a declaration from you as to which tax regime you want to choose. On this basis, tax (TDS) is deducted from your salary throughout the year. But this choice is only temporary and is only for the convenience of the employer.

At the end of the year, when you file ITR, you once again have the right to decide which tax regime you want to adopt. That is, if you had chosen the old system at the beginning of the year, but now you feel that the new system will be more beneficial for you, then you can choose it.

How to change the regime while filing ITR?

While filling in the ITR, there is an option in the form that specifies which tax system you want to choose. Here you can choose either the old or the new system, and your tax will be calculated accordingly. For example, if you had deducted TDS as per the old system, but now your tax is less in the new system, then you can also get a refund by selecting the new system in ITR.

In which cases is it not possible to change the regime?
If you are involved in a business or freelancing work, then the conditions for changing the tax regime are different for you. Usually you have to follow the regime chosen once continuously. But if you are a salaried employee, and you do not have any business income, then you can change the regime every year while filing ITR.

Disclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.