Wondering
can we change tax regime while filing ITR?
When filing your Income Tax Return (ITR), taxpayers in India have the option to choose between two tax regimes: the old tax regime with deductions and exemptions, and the new tax regime with lower tax rates but no deductions and exemptions. Whether you can switch between these regimes depends on your income source and filing process.
Can You Change Tax Regime While Filing ITR?
For salaried individuals, the choice between the old and new tax regimes can be made annually at the time of filing the ITR. Employers typically require a declaration at the beginning of the financial year, but this is not binding. The final choice is made when filing the ITR. Here’s how it works:
Declaration to Employer: At the start of the financial year, employees declare their preferred tax regime to their employer. This helps the employer in calculating TDS (Tax Deducted at Source) accordingly.
Filing ITR: At the end of the financial year, while filing the ITR, you can choose either the old or new tax regime, irrespective of the initial declaration to your employer. This flexibility allows you to make a more informed decision based on your actual income and investment details for the year.
For non-salaried individuals and Hindu Undivided Families (HUFs), switching between the old and new tax regimes is more restricted:
Opting Out Once: If you opt for the new tax regime, you can switch back to the old regime only once in a lifetime. After that, you must continue with the new regime.
Annual Choice: Like salaried individuals, non-salaried taxpayers can choose the regime annually when filing the ITR, but with the above restriction in mind.
I hope this answers your query: can I change tax regime while filing ITR.
Process of Changing RegimesUse Correct ITR Form: While filing the ITR, ensure you use the correct form and select the appropriate tax regime option.
Calculate Taxes: Compute your tax liability under both regimes to determine which one is more beneficial for you.
File Accordingly: Submit your ITR with the chosen regime. The tax department’s e-filing portal facilitates this choice.
Changing your tax regime while filing your ITR is possible and allows for strategic tax planning. Salaried individuals have annual flexibility, while non-salaried individuals and HUFs must consider the lifetime switching limitation.
This is all about can we change tax regime while filing ITR.
Get Tax Assessment and Tax Payment Guidance by Experts with NoBroker Legal Services!Read more
How to Choose Between Old and New Tax Regime?
Can I Change Tax Regime While Filing ITR?
Priyanshi
268 Views
1
10 months
2024-06-26T11:22:14+00:00 2024-06-28T21:29:49+00:00Comment
Share