There is also less chance of mistakes in filing income tax returns. But, tax experts say that salaried taxpayers whose income is up to Rs 12 lakh may have to pay more tax. The reason for this is that the new regime does not provide the benefit of deductions.

If there is capital gain, you may have to pay more tax

Taxspanner CEO Sudhir Kaushik said that filing Income Tax Return is easy in the new regime. Taxpayers do not have to provide proof of investment. But the problem is regarding capital gains. In the new income tax regime, if the total income is up to Rs 12 lakh, then rebate is available under section 87A, which makes the tax zero. But, capital gains have been excluded from this benefit.

Deductions and exemptions are not allowed in the new regime

This can be understood with the help of an example. Suppose a person has an annual income of Rs 9 lakh from salary and short term capital gains of Rs 70,000. According to the rules applicable from July 23, 2024, 20 percent tax is applicable on short term capital gains. This will result in a tax of Rs 14,000 on short term capital gains of Rs 70,000. On the other hand, in the old regime of income tax, deduction is available on section 80C, 80D and exemption on HRA, LTA and NPS. This reduces the tax liability of the taxpayer on the same income.

Deductions and exemptions reduce tax liability

If a taxpayer takes full advantage of deductions and exemptions, his tax is reduced significantly in the old regime. Under Section 80C, deduction can be claimed on PPF, ELSS, life insurance policy, children’s tuition fees. A maximum deduction of Rs 1.5 lakh can be claimed in a financial year. Apart from this, deduction on health policy premium is allowed under Section 80D. Under Section 24B, deduction on home loan interest, exemption on HRA and standard deduction of Rs 50,000 is also available. This takes the total deduction to Rs 3-4 lakh.

Many taxpayers benefited from the old regime for FY25

Tax experts say that despite the government’s efforts to increase the use of the new regime, the old regime is more beneficial for many taxpayers for the financial year 2024-25. Niyati Shah, vertical head (personal tax) at 1 Finance, said, “The price of convenience should not be higher tax liability. If a salaried taxpayer is entitled to deductions, then the old regime may be beneficial for him.”

The post Why Salaried Taxpayers Earning Up to ₹12 Lakh May Lose Out Under the New Income Tax Regime first appeared on Rightsofemployees.com.

The deadline to file ITR is July 31. If you have to fill ITR then you should start preparing for it. Let us know the complete method of filing ITR. It is very important for all salaried employees to file Income Tax Return (ITR). If there is any mistake or irregularity in it, you may be fined and legal action is also taken against you. The deadline to file ITR is July 31, which is very near.

In such a situation, if you are a salaried employee, then you should collect all the necessary documents, forms and other information to file ITR. With this you will be able to file ITR without any hassle.

Also Read: SEBI changed the rules of M-Cap, will be implemented from 31 December 2024

Start ITR from here

You should ensure that your Aadhaar is linked to your PAN card before filing ITR. You should also check the bank account in which you want the refund. If it is not validated, your refund may get stuck.

It is important to choose the right ITR form

It is important to choose the correct ITR form before filing the return. If you select the wrong form, the return will also be considered incorrect. Then you have to file revised ITR using the correct form. You can avoid this hassle by choosing the right form. If you are a salaried taxpayer then you have to file ITR-1.

What is ITR-1 form?

If your income is less than Rs 50 lakh during a financial year, you will have to fill ITR-1 form. This income should come from sources like salary, family pension and agricultural income (up to Rs 5,000).

Who cannot file ITR-1?

If you are not an Indian citizen, you cannot file ITR-1. Apart from this, there are some other conditions which may prevent you from filing ITR-1.

• Your total annual income should be more than Rs 50 lakh.
• You may also earn money from lottery, horse racing, legal betting.
• Capital gains come under the purview of capital gains tax.
• You have invested in unlisted equity shares.

These documents are necessary

You should download the Annual Information Details (AIS). In this, you will get all your previous tax details. Form 16 and other important documents should be kept with you. Although investment or TDS proof is not required to be submitted with the return. But, you should keep these documents with you so that you can show them to the authorities in case of assessment or inquiry.

Keep these things in mind

Download AIS and Form 26AS. If any error or mismatch is found in it, correct it immediately. One should avoid filling ITR form in haste. Whenever you fill the form, cross check it. With this, you will be able to correct any errors in time and your refund will not get stuck.

The post Salaried taxpayers should keep these things in mind while filing ITR, otherwise refund will be stuck first appeared on Rightsofemployees.com.

In such a situation, CBDT has issued a circular regarding the modalities of TDS deduction in 2023-24, in which it has been said that from the current financial year, the new income tax regime has become the default tax regime. In such a situation, the CBDT has told the employer that he must ask his employees whether they want to opt for the new tax regime or the old tax regime. All employees will have to inform their employer at the beginning of every financial year whether they want to opt for the new tax regime or the old tax regime.

CBDT has said in its circular that it is necessary to choose the option of new income tax regime or old income tax regime because on the basis of that the employer will deduct TDS on the income of the employee.

The Central Board of Trustees has clarified that if an employee does not inform this to his employer, then the default tax regime on that employee, which is the new tax regime, will be valid and TDS will be deducted from his income on the basis of that. In such cases, the employer will have to deduct TDS under section 192 on the income of the employee as per the tax rate of the new income regime.

Presenting the general budget for 2023-24, Finance Minister Nirmala Sitharaman had announced that the new tax regime will be considered as the default tax regime from the new financial year. The tax rate in the new income tax regime is lower than the old tax regime.

But in the new tax regime, no deduction is available on home loan interest and investment. Whereas in the old income tax regime, you can get tax exemption on Mediclaim by taking exemption on investment and home loan interest.

However, salaried taxpayers will have the option to choose either the new or the old tax regime while filing income tax returns, even if they have informed the employer to choose another option. Salaried taxpayers will have the option to choose either the new or old income tax regime every year. Whereas those who get income from business or profession can change the option of tax regime from one tax regime to another only once.

The post CBDT issued circular: For TDS deduction in 2023-24, salaried taxpayers will have to choose option in new or old tax regime first appeared on Rightsofemployees.com.