Old Vs New Tax Regime: I Have Chosen Old Tax Regime In My Office Investment Declaration For Current Fiscal, Can I Choose New Tax Regime While Filing ITR?

New Delhi: Several cases have arise the place a person tax fil has selected Old Tax Regime in his or her place of work funding declaration however would wish to know if she or he can report ITR beneath New Tax Regime all over precise submitting.

CA Kinjal Bhuta, secretary, Bombay Chartered Accountants’ Society informed Zee News that the transfer between the regimes is conceivable just for the ones people who would not have any industry source of revenue. 

“A salaried individual can make a choice of tax regime every year before the return filing season. However, what generally happens is that a salaried individual has to choose the tax regimes much earlier closer to the start of the financial year with the employer. Since the taxation slabs and rates of tax are different under the old regime and new regime, the employer shall need the choice from every employee at the beginning of the year itself so as to make an estimate of total income and taxes thereon,” Bhuta says. 

The prior figuring out, Bhuta provides, is important for the employer, for deducting tax at supply from the wage source of revenue each month. Further, some maximum odd variations between the previous regime and new regime are the deductions to be had beneath bankruptcy VIA beneath the previous regime, he provides.

Are There Any Difficulty While Shifting From Old To New Tax Regime And Vice Versa During ITR Filing?

Bhuta provides that there are particular circumstances, the place the salaried taxpayer will have decided on the previous tax regime with the employer on the time of funding declarations after which whilst submitting ITR learned that the brand new tax regime is extra really useful. In that case the tax-payer can really well make a decision to select the brand new tax regime on the time of submitting go back of source of revenue. 

Shifting From Old To New Tax Regime During Actual ITR Filing: Keep This In Mind

ITR filers must stay something in thoughts whilst making the transfer. Bhuta says, computation of wage source of revenue will fluctuate from the only proven via the employer in Form 16A- Part B and Form 26AS. 

Also, there might be money back state of affairs within the go back which is to be filed which shall fluctuate from the employer’s operating, he provides. 

There are minor probabilities of CPC enquiring at the mismatch of source of revenue presented between what’s mirrored in 26AS and the go back of source of revenue, however that may be simply catered to. Section 115 BAC (6) permits the taxpayer to select the brand new tax regime till the submitting of go back of source of revenue. One must notice that the choice is to be had most effective in the ones circumstances the place go back is filed as according to the deadlines of segment 139(1) and now not on any belated returns, Bhuta says. 

New Tax Regime Vs Old Tax Regime: Which Option Is More Suitable?

Sudhir Kaushik, Co- Founder & CEO, TaxSpanner (Subsidiary of Zaggle) advises that this is a better choice for people incomes a gross wage of 13 lakh and above to stay with the previous tax regime.

“Switching from the old tax regime to the new tax regime during the filing of Income Tax Returns (ITR) is an option available to individuals. For those earning a gross salary of 13 lakh and above, we recommend sticking with the old tax regime. While the new tax regime offers potentially lower tax rates, it does not contribute significantly to achieving long-term financial goals. Over a 30-40 year earning span, the taxes paid under the new regime do not provide direct benefits to taxpayers,” provides Kaushik.

Kaushik provides that the previous tax regime helps monetary wellness via leveraging quite a lot of advantages. He highlights following issues.

a) Exemptions: Including House Rent Allowance (HRA) and Leave Travel Allowance (LTA).

b) Tax-efficient Perquisites: Such as meal coupons, corporate automotive hire, gas and upkeep, driving force’s wage, finding out and construction bills, presents as much as Rs 5000, books and periodicals, and well being and wellness advantages.

c) Deductions: Including changes for house mortgage pastime as much as Rs 2 lakh, having the ability to elevate ahead any closing steadiness; limitless deduction for schooling mortgage pastime; and deductions beneath sections 80C, 80CCD(1b), 80CCD(2), 80D, 80G, and 80TTA/TTB for financial institution pastime.

Kaushik says, “Utilizing these options to their fullest extent is crucial for reducing tax liabilities based on current financial needs and future goals. Seeking advice from tax experts can further optimize tax planning strategies, which we refer to as diverting Tax2wellness. Understanding individual financial circumstances and aligning take-home pay with future financial aspirations provides clarity in making informed decisions.”