The new tax rates and provisions introduced by the Union Finance Minister Nirmala Sitharaman have received widespread praise as they are being seen as favouring the Indian middle class.
Notably, the New Tax Regime stands automatically applicable to taxpayers unless one chooses to opt out of it.
Experts say the Old Tax Regime may still offer a relative advantage under certain circumstances.
Here’s how you can switch from the Old Tax Regime to the New Tax Regime:
When changing the preferred tax regime, different rules are applicable on taxpayers with different types of income.
For taxpayers with business income: Such taxpayers must fill out and file a prescribed form to choose the Old Tax Regime. After opting out of the new regime, they can switch back only once.
For taxpayers without business income: Taxpayers without business income can simply select the Old Tax Regime while filing their Income Tax Return (ITR). Besides, they also have the flexibility to choose between the two tax regimes every year.
Why is Old Tax Regime beneficial to some taxpayers
Despite the overall appeal of the New Tax Regime, the Old Tax Regime may still be beneficial to some taxpayers. This is because of the deductions or exemptions that are applicable under the Old Tax Regime but not under the New Tax Regime.
You can use the tax calculator available on the official website of the Income Tax department to calculate your tax liability.
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