Income Tax Returns: What is your default regime— old or new? Key things you should know before filing ITR

2 days ago 2

As the past day to record the income taxation return (ITR) looms person and you person not yet filed the return, it is imperative to archetypal determine the taxation authorities you program to opt for. One should record their ITR by July 31 of a fiscal twelvemonth to debar penalties.

It is noteworthy to notation present that the new taxation regime is the default regime; truthful 1 volition person to deliberately opt for the aged taxation authorities if you privation to avail immoderate of the tax deductions and exemptions.

The caller taxation authorities was introduced successful Budget 2020. Income taxation slabs were altered and taxpayers were offered concessional taxation rates. However, these rates were offered with the information that respective exemptions and deductions, different disposable nether the aged taxation regime, volition not beryllium disposable nether the caller taxation regime.

In Budget 2023, the authorities focused much connected the caller taxation authorities making it much charismatic for the taxpayers.

Let america recognize much astir the 2 regimes:

Old taxation regime: The authorities that existed earlier the instauration of the caller taxation authorities is known arsenic the aged regime. This authorities allows radical to assertion much than 70 taxation deductions and exemptions to trim their taxable income.

These are the taxation rates nether the aged taxation regime:

Slab (Rs)	Tax complaint (%)
Up to 2.5 lakh	Nil
₹2.5 to 3 lakh	5%
₹3 lakh to 5 lakh	5%
₹5 lakh to 10 lakh	20%
Above 10 lakh	30%

New taxation regime: The Finance Act 2023 amended the provisions of Section 115BAC to marque the caller taxation authorities the default taxation authorities for the assessees.

These are the rates applicable nether the caller taxation regime:

Slab (Rs)	Tax complaint (%)
Up to ₹3 lakh	Nil
₹3-6 lakh	5% (rebate u/s 87A)
₹6-9 lakh	10% (rebate u/s 87A)
₹9-12 lakh	15%
₹12-15 lakh	20%
Above ₹15 lakh	30%

For nonmigratory individuals whose full income does not transcend ₹7 lakh, a taxation rebate of up to ₹25,000 nether conception 87A is applicable.

Also, the complaint of surcharge connected income supra ₹5 crore has been reduced from 37 per cent to 25 per cent nether the caller taxation regime. Therefore, the highest effectual taxation complaint has been reduced from 42.74 per cent to 39 per cent nether the caller taxation regime.

Deductions allowed nether the caller taxation authorities see a modular deduction from wage of ₹50,000 and deduction nether conception 80CCD(2) for employer's publication to worker NPS accounts.

Other deductions which are not allowed see permission question allowance, HRA, aesculapian security premium and involvement connected location indebtedness for self-occupied houses.

Informing the employer

The worker is expected to pass the leader with respect to his intended taxation authorities during the year.

If the worker does not intimate the employer, the worker volition proceed to beryllium successful the default taxation regime, and it volition beryllium presumed that helium has not exercised the enactment to opt retired of the caller taxation regime.

Catch each the

Business News,

Market News,

Breaking News

Events and