Tax Regime Switch: After the start of the new financial year (FY24), the season for filing Income Tax Return Filing is going to start soon. Right now two tax systems new and old are available for filing Income Tax Return (ITR Filing).
The government wants more and more people to adopt the new system. That is why the government has made the new tax system a default. However, taxpayers still have the option of opting for the old tax regime.
This is what it means to make default
First of all, let us know what it means to make the new tax system default. This means that if you do not inform your employer about your preferred tax regime, then the new tax regime option will automatically be decided for you. Simply put, it means that if you are a salaried person, your silence will be accepted by the Income Tax Department as yes for the new tax regime.
CBDT has given this instruction
In fact, the Central Board of Direct Taxes (CBDT) asked the employers to ask the employees whether they want to remain in the new or old tax regime. Tax on salary will be calculated according to the tax regime and the employer will deduct tax at source ie TDS. In such a situation, the question arises whether taxpayers get a chance to change an option once they have chosen it and if yes, how many times they can be switched.
If you want to earn from business then this is your chance
The Income Tax Department gives you the facility to change the option even after the default option. However, the facility to switch between the two systems is only available to those taxpayers who are getting income from salary and are not earning anything from business. Taxpayers with business income, once they opt for the new tax regime, they get only one chance to go back to the old regime. They cannot switch it again in future also.
This facility for salaried
Talking about salaried taxpayers, if they do not choose the option at the beginning of the financial year, then the new tax regime will be selected by default. After this, according to the slab of the new system, the company will deduct TDS from his salary. However, later he can switch to the old tax regime while filing returns and can claim refund if more tax has been deducted according to this regime. Such taxpayers can also switch between the two tax regimes later.
