Budget 2023 has made the new income tax regime as the default option for income taxpayers. Hence, unless an individual specifies that he/she is opting for the old income tax regime, then revised new income tax regime will be applicable
Now the question that many taxpayers will ask is: will the benefit of switching between old and new income tax regime continue?
Yes, an individual can switch between the new tax regime and the old tax regime in every financial year. However, the facility to switch between the new and old tax regimes is available only for those individuals having salaried income and does not have business income.
They may opt for old tax regime filing the tax return within due date. Salaried taxpayers will continue to have option to switch every year. However, those with business or profession income, after opting for regular tax regime will have an option to move out only once.”
This would mean that if you want to opt for the old tax regime while filing income tax return (ITR), then ensure that ITR is filed on or before the due date. If the belated ITR is filed, then new tax regime would be used to calculate the income tax dues.
What happens if a salaried individual does not specify the tax regime to employer?
Starting April 1, 2023, if a salaried individual does not specify the income tax regime preferred by him/her, then, their employer will deduct taxes on salary income based on the new tax regime by default. Note that once a regime has been chosen, it cannot be modified within the fiscal year.
Can you opt for different income tax regime while filing ITR vis-à-vis employer?
The income tax laws allow an individual to choose any income tax regime irrespective of what was communicated to the employer. Hence, if you opt for new tax regime with employer, then also you have an option to for old tax regime while filing ITR. Ensure that ITR is filed on or before the July 31 due date.
Who cannot switch between the two regimes every year?
According to income tax laws, individual taxpayers with business income are not allowed to select between the old tax regime and the new tax regime each year. Individual taxpayers and HUFs with business income can opt for the new income tax regime. However, once they have opted in, they will only have a one-time chance to return to the old tax structure. They will be unable to choose the new income tax regime in future fi ..
What are the income tax slab and tax rates under the revised new tax regime?
Effective from April 1, 2023 the income tax slabs under the new income tax regime will now be as follows:
|Income tax slabs (In Rs)
||Income tax rate (%)
|From 0 to 3,00,000
|From 3,00,001 to 6,00,000
|From 6,00,001 to 9,00,000
|From 9,00,001 to 12,00,000
|From 12,00,001 to 15,00,000