The last date for filing income tax returns is 31st July, and now less than a week is left for it to end. The department has also made it clear that it is not going to make any changes in the last date for filing ITR. That is, if someone does not file his ITR before 31st July, then he will have to pay a penalty. There is no concession in that. Now those who have still not been able to file their income tax returns and are wondering whether they can switch from the old tax regime to the new one at the last moment. So they should know this rule.
People whose source of income is other than business and profession can switch the option between the old tax regime and the new tax regime every year. This option should be exercised while filing income tax return and can be changed every year, provided the income tax return is filed within the due date.
These people get only 1 chance
However, for individuals earning income from business and profession, the tax system chosen in the previous tax return applies to subsequent years as well. Under section 139 (1) of the Income Tax Act, the tax system can be changed only once in a lifetime by submitting an application in the prescribed Form 10IE on or before the due date of filing the income tax return. In simple terms, the tax regime under which you are filing your ITR can be changed only once in future years.
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The new tax system is a simpler and simpler tax system with limited exemptions. Which tax system is more beneficial depends on the deductions available in the case of a taxpayer. The new tax system will be more beneficial for taxpayers who earn money only from salary with deductions under section 80C of the Income Tax Act.
Why is the old tax regime the best?
For other taxpayers with eligible deductions like interest on home loan or home rent allowance (HRA), the old tax system may prove to be more beneficial. Apart from this, it should be noted that the tax system chosen by the employees while giving declaration to the employer is not final and can be changed while filing income tax return. Let us tell you that if you opt for the old tax regime, then you can save income up to Rs 12 lakh from reaching the tax net.
