Income Tax Return 2025: The time has come to file Income Tax Return (ITR), you must have also started preparing. Have you thought about which of the New Tax Regime and Old Tax Regime will be right for you.
Because taxpayers can choose any one of the two different regimes while filing their Income Tax Return (ITR Filing 2025). Both regimes have different exemptions and benefits. If you do not choose any regime yourself while filling the form, then your return will be filed under the New Tax Regime. Actually, from the financial year 2023-24, the New Tax Regime has been made the default tax regime.
Old Tax Regime vs New Tax Regime
There is no single answer when it comes to choosing the right tax regime for each individual, the choice of regime depends on many factors such as your income, investments and how many deductions you are eligible for. Opting for the new tax regime will give a tax exemption to salaried individuals on income up to Rs 7 lakh for the recently ended financial year. The standard deduction has been increased to Rs 75,000 under the new tax regime from FY 25.
On the other hand, the old tax regime allows taxpayers to claim several deductions and exemptions such as Section 80C, Section 80D, Housing Rent Allowance, etc. However, the limit of standard deduction under this has not been increased, it is still Rs 50,000.
How many times can I change tax regime while filing ITR?
According to the information given on the website of the Income Tax Department, a person with non-business income can switch between the old tax regime and the new tax regime every year. The old tax regime can be chosen before the due date of filing the return under section 139(1) of the Income Tax Act.
Can everyone switch tax regimes?
For individuals with business or professional income, the facility to switch between tax regimes is limited. These taxpayers cannot switch regimes every year. According to the Income Tax website, an individual, HUF, AOP (not cooperative societies), BOI or artificial juridical person with business or professional income will not be eligible to choose between two tax regimes every year.
Once they exit the New Tax Regime, they have only one chance to switch to the New Tax Regime. Remember that once they switch back to the New Tax Regime, they will never be able to opt for the Old Tax Regime in the future.
Is there a deadline to switch?
The option to choose the tax regime is available only if the ITR is filed by the due date. Taxpayers who file belated returns will be able to file returns only under the new tax regime. In such cases, the income tax portal does not allow switching to the old tax regime.
