Wednesday, April 24, 2024

Income Tax 2023 new slab: Once a new tax regime is chosen, can one go back to the old regime? know the rules

Income Tax 2023 New Slab: Many such changes have been made in the new tax regime, due to which now a shift towards this tax regime can be seen. In such a situation, the question may arise that if they choose the new tax regime, then can they come back to the old tax regime? Let’s know.

Income Tax 2023 New Slab: There have been many big announcements regarding income tax in the Union Budget. Many changes have been made in the new tax regime that the Modi government brought in 2020 to make it more prominent and attractive. Even Finance Minister Nirmala Sitharaman said that now the new tax regime will remain the default tax regime. Many such changes have been made in the new tax regime, due to which now a shift towards this tax regime can be seen. In such a situation, a question may arise in the mind of many people if they opt for the new tax regime, then can they come back to the old tax regime or not? Let us know, but first, let us also know what changes have taken place in the new tax regime.

New Income Tax Slab, New Tax Regime: What are the changes in the new tax regime?

This time, in the new tax regime in the budget, the basic exemption limit (tax-free limit) has been increased to Rs 3 lakh. Earlier there was no tax up to an income of Rs 2.5 lakh. At the same time, instead of 6 tax slabs, now there will be 5 tax slabs. In instead of Rs 5 lakh, income up to Rs 7 lakh will be tax-free with a rebate. Apart from this, those earning Rs 15.5 lakh in the new tax regime will also get the benefit of a standard deduction, which will be Rs 52,500.

Why the changes in the new regime?

You get lower tax rates in the new tax regime that came into effect from April 1, 2020, and after the budget changes this time, income up to Rs 3 lakh will be out of tax exemption in the new tax regime, and income of Rs 15.5 lakh or above Will be able to take advantage of the standard deduction. Earlier, no exemption was available in this regime, because the tax rates were kept low in it. This can also be considered one of the main reasons that a large number of taxpayers continued to pay taxes in the old regime itself.

Switching Between Old and New Tax Regimes: What is the rule on switching tax regimes?

After bringing the new tax regime, there was confusion whether the tax regime can be changed again and again. On this, the Central Board of Direct Taxes (CBDT) issued a circular on April 13, 2020, in which it was told that those having ‘business income’ i.e. taxpayers whose income comes from a business, will get this option only once. That they can switch the tax regime.

Expert told…

Tax expert Gauri Chadha told that “With the new tax regime, there is such a rule that those having business income get a chance to switch the tax regime only once. They cannot change the tax regime in every new financial year. But on the contrary, salaried professionals And pensioners will have the option to switch their tax regime every financial year, that is, if you are a salary earner or a pensioner, and last year you paid tax in the old tax regime, you can file your taxes this year as per your convenience. Accordingly, you can choose a new tax regime. After that, you will have the option that next year you can again choose the old tax regime. That means you can switch your tax regime every year.” The salaried professional will have to declare every year in which regime he will file tax.

What if those with business income have made the switch?

If suppose you are a taxpayer with business income and you have chosen a new tax regime once. So you will have the option you can come to the old regime once again, but they will get this opportunity only once in their lifetime. That is, those with business income will get the option to switch the tax regime only once in their entire life.

What does it mean to make New Tax Regime the default?

While making the announcement on income tax in the Union Budget, Finance Minister Nirmala Sitharaman also announced that now the new tax regime will remain the default tax regime. What does it mean? On this, CA Rahul Kumar Aggarwal said that “Default directly means that the Income Tax Portal will now keep the new tax regime on the default setting. That is, the way earlier you had to choose the new tax regime and everything on the portal will be of the old regime.” Now it will be the opposite, that is, now you will get everything according to the new tax regime, and you will have to choose the old tax regime separately.

RELATED ARTICLES

Most Popular