Any person can switch between new and old tax systems or between old and new tax systems. However, the rules are not the same for every taxpayer. So choose a diet only after knowing all the rules well. While filing the Income Tax Return (ITR) every year, taxpayers are confused whether the new tax system is better or the old tax system? The government has made the new tax system a default. That is, if you do not clearly get out of the old tax system, then you will automatically come under the new tax system. If you want, you can go back to the old system. Provisions in this regard have been made in the Income Tax Act.
Rules for non-commercial income
The tax system can be changed, but not rules for all taxpayers are the same. Provisions are different for employed people and people from business. If your income comes from salary, interest or rent (non-commercial income), you have the option to switch between new and old tax arrangements every year. This means that if you opted for a new tax system last year, then you can return to the old tax system this year. However, you should take this decision before the last date for filing ITR (31 July, 2025). According to the Income Tax Department, you will be able to choose the option of old tax system only when you file your returns on time.
Vocational income rules
The rules of change in tax system are strict for people with business or professional income. Such taxpayers cannot change the tax system every year. According to the information available on the Income Tax Department’s website, taxpayers with commercial or commercial income get this opportunity only once. This means that if they choose a new tax system. And later they return to the old tax system, after which they will not get an opportunity to choose a new system. Keep in mind that those who choose the old tax system will have to fill Form 10-IEA before filing ITR. This form confirms which tax system they are choosing and are they eligible for it.
What is the last date for filing ITR?
According to the Income Tax Department, taxpayers who do not require audit will have to file their ITR by July 31, 2025 (for FY 2024-25, assessment year 2025-26). If a person misses the deadline, he can file delayed returns by 31 December 2025, but he will have to pay a delay fee. If a taxpayer has admitted his ITR on time, but later he feels that he should have chosen a separate tax system, he can file a revised return. However, this option is available only to those who have filed their ITR before the due date.
Which method should you choose?
Now the question arises that which system should you choose? For this, you have to closely understand the benefits of both tax systems. For example, many types of discounts and cuttings were available in the old tax system. Such as Section 80C (PPF, EPF, Life Insurance), Section 80D (Medical Insurance), HRA (House Rent Allowance). At the same time, such benefits in the new system are less, but the income of Rs 12 lakh has been made tax free. Therefore, first of all you should calculate which method can give you more benefits and should choose accordingly.
