ITR filing
Filing ITR for common salary taxpayers is an important process of every year. But when it comes to choosing tax regime, many people have the question that the tax regime can be changed while filling ITR, while the employer has deducted tax under any other option?
So the answer is yes, you can change the tax regime while filing ITR, whether your employer has deducted TDS under the old regime or under the new regime. Let’s know what is the difference between these two regulations.
What is the difference between the old and new tax regime?
The government has implemented two types of tax system from 2020, old and new. The tax rates in the old tax regime are slightly higher, but you can take advantage of many discounts and cuttings. Such as HRA, LTA, Section 80C (LIC, PF etc.), 80D (Medical Insurance), 80CCD etc. At the same time, tax slabs are at low rates in the new tax system, but most of the discounts and cuttings are not available in it. This system can be beneficial for those who do not invest much and want to pay less tax directly.
Can you change the tax revision already selected?
When you are in a job, the employer takes a declaration from you which tax system you want to choose. Based on this, tax (TDS) is deducted from your salary in a year. But this election is only temporary and only for the convenience of the employer.
At the end of the year, when you file an ITR, then you once again have the right to decide which tax system you want to adopt. That is, if you had chosen the old system at the beginning of the year, but now you feel that the new system will be more beneficial for you, then you can choose it.
How to change the regime while filing ITR?
While filling ITR, there is an option in the form which tax system you want to choose. Here you can choose one of the old or new arrangements, and accordingly your tax will be calculated. For example, if you had deducted TDS according to the old system, but now your tax is reduced in the new system, then you can also get refund by selecting a new system in ITR.
In which cases it is not possible to change the regime?
If you are associated with a business or freelancing work, then the conditions of changing the tax regime are different for you. Usually, you have to continuously adopt the recipient of the chosen regime. But if you are a salaried employee, and you do not have any business income, then you can change the system while filing ITR every year.