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Income Tax System: At present two tax systems are running in the country. The first is the old tax system, which has been in place for years. The second new tax regime, which was introduced by the central government in the 2020 budget. Taxpayers are being given the opportunity to choose one of these systems. However, the new tax regime has been made the default in the 2023 budget. Now if you do not choose the old tax system while paying tax, then your tax will be calculated according to the new tax system. At present, salaried people and businessmen will be given the opportunity to choose between the old and new tax regime every year. However, if you do not fall in either of these two categories, you will get this opportunity only once.
Finance Ministry tweeted
To curb the rumors spreading regarding two tax systems, the Finance Ministry also made a tweet at 11.59 pm on March 31. In this, the Finance Ministry said that avoid wrong and misleading information related to the new tax system. No new changes are being brought for taxpayers from April 1, 2024. The last date for submission of investment and expenditure documents for the financial year 2023-24 was March 31.
What is the difference between the two tax systems?
In the old tax system, you get about 70 types of deductions and exemptions. Apart from this, you can also avail tax exemption of up to Rs 1.5 lakh in income tax under Section 80C. In the new tax system, you do not get the benefit of many big tax exemptions including HRA, LTA, Section 80C. Now this tax system has been made default. But, you can make changes in it every year. You can make any change like one year old, next year new and then old tax system. The Finance Ministry has given complete freedom to salaried people and business people in this matter. If you do not fall in any of these categories then choose wisely as you may not get a second chance.
The self-employed will be able to choose the tax regime once
If you are self-employed, you will be able to switch to the old tax system only once. Such taxpayers will also have to file Form 10-IE along with the income tax return. If he fails to do so, he will not be able to opt for the old tax system that year. You must submit Form 10 IE before filing the return. After filling this form, you will be given a 15 digit acknowledgment number. They will have to provide this number while filing ITR. The Central Board of Direct Taxes (CBDT) also launched two new income tax return forms ITR 1 (SAHAJ) and ITR 4 (SUGAM). In ITR 1 form you get the option to choose the tax regime.
