Income tax return vis a vis Tax Regime from AY 2024-25 Onwards: Points to Remember

Here are few important Points which taxpayers may remember while filing the income tax return vis a vis Tax Regime from AY 2024-25 Onwards

1. Default Tax Regime:
– The default tax regime is the New Tax Regime under Section 115BAC. If you wish to opt for the Old Tax Regime, you must specifically select it in the ITR form.

2. ITR 1 and ITR 2 Filers:
– You can choose either the Old or New Regime while filing your ITR.
– No need to file Form 10IEA for opting into the Old Tax Regime for AY 24-25 or for opting out of it from AY 25-26 onwards.

3. ITR 3 and ITR 4 Filers:
– To select the Old Tax Regime for AY 24-25, you must file Form 10IEA.
– If you wish to opt out of the Old Tax Regime from AY 25-26 onwards, you must file Form 10IEA again. After opting out, you cannot switch back to the Old Tax Regime.

4. Deadline for Opting In/Out:
– You must exercise the option to opt in or out of the Old Tax Regime on or before the due date under Section 139(1).

5. Tax Rebates:
– Old Regime: Tax rebate under Section 87A is ₹12,500, subject to a total income of ₹5 lakh.
– New Regime: Tax rebate under Section 87A is ₹25,000, subject to a total income of ₹7 lakh.

6. Choosing the Right Regime:
– If you have deductions only under Section 80C or no deductions at all, the New Regime is generally more beneficial.
– If you claim deductions for home loan interest, Section 80C, and Section 80D, the Old Regime is likely more advantageous.

7. Impact of Previous Selections:
– Previous selections (up to AY 23-24) have no impact on regime selection for AY 24-25. AY 24-25 is the first year for filing Form 10IEA for opting into the Old Tax Regime for ITR 3 or ITR 4 filers.

8. Comparison and Calculations:
– Use a reliable calculator to compare tax liabilities under the Old vs. New Regimes. This can help determine potential tax savings with a specific regime.