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Change tax regime: This time nothing special came for the taxpayers in the Union Budget 2023-24. The new tax regime has now become the default regime and still many tax benefits have not been included in this regime. In such a situation, a large number of taxpayers are still in the mood to file income tax returns under the old tax system. If you had filed your ITR last year under the new tax regime, but this time you have increased your investment or taken a home loan, then to get exemption on these, you will have to file ITR in the old tax regime only. For this you can change your tax system.
What are the rules for changing the tax system?
The new tax regime was made the default in Budget 2023. This means that if you do not choose your tax regime yourself, your tax will be automatically calculated under the new tax regime. But you have the right to change your tax regime before the due date of filing ITR. Salaried employees have the option to change their tax regime as per their wish every financial year, whereas those with business income, i.e. taxpayers whose income comes from a business, will have this option to change their tax regime only once. The system can be changed.
Change your tax system in 3 steps
Step 1: First choose your tax regime
See which arrangement benefits you more. In the new tax system, you will get a lower tax rate, but most of the deductions and exemptions will not be available. Tax rates are high in the old tax system, but here you get tax exemption on many types of investments, expenses and other things.
Step 2: Check your eligibility
1. Know if you need any documents to change tax regime. Salaried employees do not need to fill a separate form for changing the regime, they can first indicate in which regime they are filing the return while filling their ITR form.
2. If you earn income from business, you can change the tax regime only once in your life and for this you have to fill Form 10IE before 31st July in the assessment year.
Step 4: How to choose a tax regime?
The salaried employee has to follow these steps-
- Open your ITR form.
- You must have been asked somewhere above which regime you are choosing.
- Choose the diet as per your choice here.
- – Now fill, verify and submit your ITR.
Those having business income will have to follow these steps-
- Download Form 10IE and fill it online.
- Fill it before 31st July of the assessment year.
- Now choose the tax regime as per your choice and fill the ITR.
If people with business income are going back to the old tax regime, they will get this option only if they have never returned before. It is also worth noting that they cannot take tax exemption under the old system in the current year's return.
Fill your ITR carefully and submit it only after checking. Keep in mind that the last date for filing income tax returns for the financial year 2023-24 (AY 2024-25) is July 31, 2024.
