March ends and April begins, with this the race for income tax begins. The process of saving tax by sitting with CA has also started. Some are calculating to save money in the new regime while some are calculating to save money on home loan, 80C investment and insurance and tax on the money received from the market by using the old regime.
But, amidst all this hustle and bustle, do not forget an important date or rather deadline. If you exceed this limit then you will not get any income tax exemption. Even if you are paying home loan interest or earning from FD interest.
Actually, we are talking about Income Tax Return (ITR Filling) for the financial year 2023-24, the deadline for which has already been fixed by the Income Tax Department as July 31, 2024. If you file your ITR before this deadline, then you will be given a chance to choose the old regime. After crossing the prescribed deadline, taxpayers will not be given the option to choose the old regime.
What is the old and new regime?
The government had implemented a new tax regime in 2019, in which the income tax slab rates are lower, but no tax exemption of any kind is given. The government had implemented the new regime only after eliminating 70 types of tax exemptions. At the same time, even though the slab rate is higher in the old regime, there is a direct tax exemption of Rs 3.50 lakh on home loan interest and principal, Rs 1.5 lakh under 80C and Rs 75 thousand on insurance. Apart from this, you get tax exemption on other options also.
Why do you have to choose a regimen?
The government has implemented the new tax regime by default from the budget of 2023. This means that if the investor does not choose any regime, his earnings will be calculated under the new regime and tax will be deducted as per its rate. This means that if you want to avail tax exemption on loan, investment or other types of allowances, then you will have to choose the old tax regime yourself. For this, it is necessary to file returns before 31st July.
If you miss the deadline…
If a taxpayer does not file his return by July 31, then from August 1, 2024 to December 31, 2024, such taxpayers will be given a chance to file belated ITR. This means that such taxpayers will be able to file their returns by paying some penalty, but they will not be allowed to use the old tax regime. In such a situation, tax will be deducted directly from their earnings at the same rate by implementing the new regime.
