“Consider tax implications before shifting to India’s New Tax Regime 2023: Evaluate deductions, business income impact, and file ITR by July 31. Choose wisely between old and new regimes for optimal savings.”
In the Budget 2023, one of the important proposals is reduced rate of tax and increased threshold limit under the New Tax Regime. This article is emphasizing on a few of the check-points that need to be kept in mind before switching over to the New Regime from the old regime.
Following are the check-points:-
♦ Filing ITR by 31st July
Those who want to switch from the old regime to the new regime for financial year 2022-23, should be required to file their Income Tax Return by 31st July 2023. From the financial year 2023-24 a new tax regime will become the default regime. That means while filing the Return of Income for financial year 2023-24 under the old regime, one has to select that option.
♦ Compare the taxability before switch
It is advisable to compare the taxability under the old regime with the new regime before switching. As those who have business income can’t always make the switch. Only the taxpayers having no business income can switch between the tax regimes each year.
♦ Additional compliance for those having business income
Those having business income and want to switch to the new regime are required to file a declaration in Form 10IE before filing the Return of Income.
♦ Multiple investments
Taxpayers who have multiple investments and covering all the threshold limits of deductions for e.g. Rs.1,50,000/- u/s 80C, Rs.50,000/- u/s 80CCD(1B), Rs.50,000/- u/s 80D and having home loan or education loan too then for those taxpayers, it is always advisable to go for old regime than for new regime.
Therefore, what is important is to have a complete check before switching to the New Regime from the old regime.
Hope this small write-up serves you.
You can reach to me at rohanrp1983@gmail.com
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