2024 Income Tax Return Filing: Can Salaried Workers Modify Their Tax Regime?

The old and new tax regimes are the options that Indian employees pick from, depending on what might lower their total tax burden. Salaried staff members are able to provide their employer with a statement outlining their chosen tax system. Internal portals, HR forms, or particular tax regime selection procedures may be used for this.

It is noteworthy that this decision may only be taken once a year for TDS reasons.

Is it possible to modify the tax regime during ITR filing?

No matter what you choose with your employer, you may still modify your tax regime when completing your income tax return (ITR).

In the event that an employee does not give a choice, the new tax system will be applied. The employer withholds tax at source (TDS) in accordance with the selected tax slab from the employee’s pay throughout the course of the year based on their choices.

Can a paid employee switch their tax system?

When submitting their ITR, salaried workers have the choice to either the old or new income tax regimes. In the Union Budget 2020, the government unveiled a new income tax system that offers reduced tax rates in exchange for the removal of the majority of deductions and exemptions.

This is true even if you choose to use the new TDS (Tax Deducted at Source) system all year long.

Taxpayers are free to choose whatever regime best suits their needs and budget. Nevertheless, if a person decides on a certain regime for a fiscal year, it cannot be altered within that year. When submitting your ITR, you must choose the regime that best fits your financial situation and adhere to it for the whole fiscal year.

Advantages:

Because of this flexibility, you may choose the tax regime that, given your income and claimed deductions, minimizes your tax burden.

Changing Regimes:

No further paperwork is needed.

Just choose your preferred regime (old or new) directly from the ITR form.

Prior to making your ultimate decision when submitting your ITR, it is advisable to assess both regimes (taking into account your deductions).