Many Tax payers ask the important query about how to change tax regime from new to old or vice versa on my YouTube Channel. Is it allowed to tax regime?
Yes you are allowed to change tax regime from new to old or vice versa while filing ITR (Income Tax Return). One way is to choose the tax regime at the start of financial year and declare it to your employer. And in some cases, if you were not aware about the Tax Slabs and deductions during declaration, and later realized you can save income tax with old tax regime, than you can change it while filing Income Tax Return.
- Change Tax Regime from New to Old or vice versa Video
- Steps to Change Tax Regime
- Advantages of Old Tax Regime
- Advantages of New Tax Regime
- Which Tax Regime is Better for you?
- Can you Select Old Tax Regime Next year if New Tax Regime is selected in this year?
Watch below video to know how to change tax regime.
Change Tax Regime from New to Old or vice versa Video
Steps to Change Tax Regime
Let us now understand all steps to change tax regime while filing ITR:
- Go to Official Income Tax Website
- If you are first time user than “Register” and create an account
- If you already have an account than “Login“
- After Login, you need to proceed to file Income Tax Return (ITR) – Click on “File now“
- Next you will get the details about Personal Info, Income and Deduction details. You have to go in “Personal Information” section
- Under Personal Information, you have to scroll down to see option to Select New Tax Regime under Section 115BAC
- This option allows you to select new tax regime. If you want to opt for new tax regime than select yes, or else for old tax regime – select No
ALSO READ: All Steps to File ITR (Income Tax Return)
Advantages of Old Tax Regime
What are the advantages of opting for Old Tax Regime?
- Old Tax Regime helps us to claim Deductions that helps Tax Payers to Save Income Tax
- Even Standard Deduction of Rs. 50,000 is applicable for salaried employees and pensioners in old regime
- Old Regime is better when your income is not more than Rs. 10 Lakh in a year, as this will help you to reduce taxable income by using various Tax Saving options
Advantages of New Tax Regime
What are the advantages of new tax regime?
- New Tax regime has reduced tax slab rates
- This regime helps you to pay less income tax compared to old tax regime if you don’t make any investments
- If you income is above Rs. 10 Lakh in a year and you don’t have any investment deductions to be claimed, you can select new tax regime to pay income tax
ALSO READ: Income Tax Brackets in India
It is always better to calculator income tax based on old and new tax regime and select accordingly the regime that helps to pay less income tax. Use below calculator to calculate your income tax and help yourself choose the right tax regime for you:
Which Tax Regime is Better for you?
The answer to this question depends on your income and investments.
If your income is within 15 Lakh in a year and you can make maximum allowed deductions to save income tax, then you can save a lot of tax with Old Tax Regime.
Whereas if you don’t make any investments, you can go for New Tax Regime since it has reduced tax slab rates.
There is no best fit for all of us in this case and depends on individual to individual.
Below is the video on some calculations to give you some more clarity on Old or new tax regime selection:
Old vs New Tax Regime Which is Better? – Video
Can you Select Old Tax Regime Next year if New Tax Regime is selected in this year?
Yes this is possible as we have seen above, we get the option to select old or new tax regime while filing ITR. You can follow the steps to file ITR and select the best tax regime applicable to you.
So you can easily change tax regime from new to old or vice versa, either by informing your employer at the start of financial year or after the end of financial year during filing Income Tax Return.
While filing income tax return, you get the option to select new tax regime under Section 115BAC as Yes or No.
Some more Reading
- Old vs New Tax Regime Calculator in Excel
- Important Facts about Income Tax Calculation
- Section 80C Deductions List to save income tax
- TDS Calculation on Salary using Examples
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Income Tax Calculator App – FinCalC
For Income Tax Calculation on your mobile device, you can Download my Android App “FinCalC” which I have developed for you to make your income tax calculation easy.
What you can do with this mobile App?
- Calculate Income Tax for new FY 2023-24 and previous FY 2022-23
- Enter estimated Investments to check income tax with Old and New Tax Regime
- Save income tax details and track regularly
- Know how much to invest more to save income tax
- More calculators including PPF, SIP returns, Savings account interest and lot more
Use Popular Calculators:
- Income Tax Calculator
- Home Loan EMI Calculator
- SIP Calculator
- PPF Calculator
- HRA Calculator
- Step up SIP Calculator
- Savings Account Interest Calculator
- Lump sum Calculator
- FD Calculator
- RD Calculator
- Car Loan EMI Calculator
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