The time has come when you have to decide which of the new and old regimes of income tax you will use. There are a few weeks left for the new financial year to start. The new financial year will start from 1 April. If you are going to use the old regime of income tax in the financial year 2025-26, then you will have to make tax-saving investments. If you are going to use the new regime, then you will not need to make tax-saving investments. It has to be kept in mind that now the new regime of income tax has become the default regime. This means that until an individual taxpayer selects the old regime, his tax will be calculated according to the new regime.
Can you change the regime every year?
The Income Tax Department has given more facilities to salaried taxpayers. If your income comes only from salary, interest and rent, then you can change the tax regime every year. This means that if you have used the old regime in this financial year, then you can use the new regime in the next financial year. Business people and professionals do not have this facility. If they select the new tax regime, then they will not have the option to return to the old regime again in the next financial year.
What is the deadline for filing income tax returns?
According to the Income Tax rules, if a taxpayer selects the old regime, he will have to submit Form 10-IEA before filing the income tax return. However, salaried individuals and taxpayers who do not have business income can change the regime every year. You will have to file the income tax return for this financial year by July 31, 2025. If for some reason you are unable to file the return by this deadline, then you can file the return till December 31, 2025. But, for this you will have to pay a late fee.
Also read: SIP or PPF, which one is more beneficial to invest Rs 10,000 every month for 15 years?
Which regimen is best for you?
Before switching the income tax regime, it is important to know which regime is more beneficial for you. If you have taken a home loan and do tax-savings, then the old regime can be beneficial for you. But, if you have not taken a home loan and do not do tax-saving investments, then the new income tax regime is beneficial for you. Most deductions are not available in the new regime, but the tax rates are low.
