New Tax Regime as Default for A.Y. 2024-25 – Official Income Tax Regime & Tax Calculator

New Tax Regime as Default for A.Y. 2024-25 – Official Income Tax Regime & Tax Calculator : Guidelines for Individuals, HUFs, AOPs, BOIs, and Artificial Juridical Persons

Income Tax Department, Government of India has established the New Tax Regime as the default tax regime for the Assessment Year (A.Y.) 2024-25. This regime applies to individual taxpayers, Hindu Undivided Families (HUFs), Associations of Persons (AOPs) (excluding cooperative societies), Bodies of Individuals (BOIs), and Artificial Juridical Persons.

Taxpayers who prefer the Old Tax Regime must follow specific procedures depending on their eligibility to file different Income Tax Return (ITR) forms.

View: Option under Income Tax Section 115BAC – Old vs. New Tax Regime: Circular with format of Declaration for Old Regime

How to Opt for the Old Tax Regime

For Taxpayers Eligible to File ITR 1 & 2

If you are eligible to file your return of income using ITR 1 (Sahaj) or ITR 2:

1. Select the Relevant Option: During the process of filing your ITR, you will have the option to choose between the New Tax Regime and the Old Tax Regime. Simply select the Old Tax Regime option within the ITR form.
2. File Within the Applicable Due Date: Ensure that your tax return is filed within the due date to benefit from the Old Tax Regime.

For Taxpayers Eligible to File ITR 3, 4 & 5

If you are eligible to file your return of income using ITR 3, ITR 4 (Sugam), or ITR 5:

1. File Form 10-IEA: Before filing your ITR, you must submit Form 10-IEA to notify the Income Tax Department of your choice to opt for the Old Tax Regime.
2. File Return Within the Applicable Due Date: After submitting Form 10-IEA, proceed to file your ITR 3, 4, or 5 within the due date.

Importance of Comparing Tax Liability

It is crucial to compare your tax liability under both the New Tax Regime and the Old Tax Regime before finalizing your tax return. The New Tax Regime offers lower tax rates with fewer exemptions and deductions, while the Old Tax Regime allows for various deductions and exemptions which might result in a lower tax liability for some taxpayers.

To facilitate this comparison, use the Income Tax Calculator provided by the Income Tax Department. This tool will help you accurately calculate and compare your tax liabilities under both regimes.

View: Deduction of TDS under Section 115BAC – Option for intended tax regime be submitted by each employee : IT Circular 04 of 2023

Steps to Use the Income Tax Calculator

1. Visit the Income Tax Department’s official website.
2. Navigate to the Income Tax Calculator: Find the calculator under the ‘Tax Tools’ or a similar section on the website.
3. Enter Your Details: Input your income details, deductions, and exemptions as applicable.
4. Compare Results: Review the tax liabilities computed under both the New Tax Regime and the Old Tax Regime to make an informed decision.

For the A.Y. 2024-25, the New Tax Regime is the default choice for individuals, HUFs, AOPs, BOIs, and Artificial Juridical Persons. However, those who wish to continue with the Old Tax Regime can do so by following the specified procedures based on their ITR form eligibility. Always compare the tax implications under both regimes to determine the most beneficial option for your financial situation.

View: Ready Reckoner – Comparison of Income Tax for F.Y. 2020-21 under Existing & New Regime i.r.o. Normal, Senior & Super Senior Citizen

Ensure timely submission of your ITR and any necessary forms to avail the benefits of your chosen tax regime.

For more details and to access the Income Tax Calculator, please visit the official Income Tax Department website.

Note: This article is based on the guidelines effective as of June 21, 2024. Tax laws are subject to change, and it is advisable to consult with a tax professional or refer to the latest updates from the Income Tax Department.