Tax season can often feel like a maze of rules and regulations, and one of the recent changes that has added complexity for salaried individuals in India is the introduction of the New Tax Regime. To make things clearer, let’s dive into the key points you need to know when it comes to choosing between the New and Old Tax Regimes and how revisions to your tax return are affected.
1. Choice of Tax Regime
When filing your original tax return under section 139(1), you have the crucial choice between the Old Tax Regime and the New Tax Regime. This choice determines how your income will be taxed and the deductions you can claim.
- Old Tax Regime: Under this regime, you are eligible to claim various deductions and exemptions such as HRA (House Rent Allowance), standard deduction, and deductions under sections 80C, 80D, 80G, etc. These deductions help reduce your taxable income, potentially lowering your tax liability.
- New Tax Regime: The New Tax Regime offers reduced tax rates but does away with most deductions and exemptions. This means you’ll pay tax at a lower rate on your income, but you won’t be able to claim many of the tax-saving deductions available in the Old Tax Regime.
2. Revising Your Tax Return
Now, here’s where things get interesting. If you initially chose the Old Tax Regime when filing your original tax return, you cannot switch to the New Tax Regime when revising your return for that Assessment Year. Similarly, if you originally opted for the New Tax Regime in your original return, you can’t switch back to the Old Tax Regime for that Assessment Year when revising.
3. Sticking to Your Original Choice
It’s essential to stick with the Tax Regime you selected in your original filing when revising your return. Attempting to change the regime during the revision process will not be allowed. Your return will be processed as per the regime you chose at the time of filing the original return under section 139(1). There won’t be any warnings or options to switch regimes when revising your return.
4. The Importance of Simplicity
To make the process as straightforward as possible, it’s advisable to keep things simple. Select the Tax Regime that aligns with your financial situation and goals when filing your original return, and then maintain consistency when revising.
In ITR 1 & 2 forms, there is no requirement to file form 10IE for opting in or withdrawing from a regime. This means that your return will be processed automatically based on your initial choice, and there is no room for changing your regime during the revision.
In conclusion, choosing between the Old and New Tax Regimes requires careful consideration of your deductions and exemptions. Once you’ve made your choice and filed your original return under section 139(1), it’s crucial to stick with that choice when revising your return for that Assessment Year. The tax department will process your return according to the regime you initially selected, and there will be no opportunities to switch. So, when it comes to your tax regime, keep it simple and consistent with your financial goals.-
– Author: CA Brijmohan Lavaniya
– Co-Author: Siddharth Sachan
Author Bio
Sir can a person file another revised return under old regime because his first revised return was processed under old regime though he opted for new regime in first revised return. please advise.