ITR Filing : You can change your tax system even at the last moment before filing ITR! Know what the rule is?

ITR Filing: The last date for filing income tax returns is 31st July, which is less than a week away. The department has also clarified that it is not going to make any changes in the last date for filing ITR. That is, if a person does not file his ITR before July 31, he will have to pay a penalty.

No relaxation will be given. Now those who are still unable to file their income tax returns and are wondering if they can switch from the old tax system to the new one at the last moment. So they should know this rule.

People whose source is different from business profession can switch between the old tax system and the new tax system every year. This option should be exercised by filing the income tax return on the due date and it can be changed every year.

These people only get 1 chance

However, for persons deriving income from business and profession, the tax regime chosen in the previous tax return is applicable in subsequent years also. A tax system can be changed only once in a lifetime by submitting an application in the prescribed Form 10IE on or before the due date for filing the Income Tax Return under Section 139(1) of the Income Tax Act. Simply put, the tax regime under which you are filing your ITR. It can change only once in future years.

The new tax system is a simpler and simpler tax system with limited exemptions. Which tax system is more beneficial depends on the deductions available in the case of the taxpayer. The new tax regime will be more beneficial for taxpayers earning money only from salary with deductions under Section 80C of the Income Tax Act.

Why is the old tax system better?

For taxpayers with other eligible deductions like interest on home loan or Home Rent Allowance (HRA), the old tax system may prove more beneficial. Further, it should be noted that the tax regime chosen by the employees while declaring to the employer is not final and can be changed while filing the income tax return. Let us tell you that if you opt for the old tax system, you can save your income up to 12 lakh rupees from reaching the tax net.