How to Opt for New Tax Regime in India

After the declaration for the finance ministry about the new tax regime, every taxpayer is confused. Whether one needs to fill the Form 10IE or not has become a tricky problem to solve. In the latest changes, a taxpayer must declare their choice to pay taxes through the new regime.

Are you opting for the new tax regime? Here’s how you need to go about it!

What is the old tax regime?

In the old regime, the taxes were based on different income categories taxpayers qualified under. The tax slabs for each individual were considered after considering the sum for deductions in chapter VIA, i.e. Section 80 in the Income Tax Act. The deductibles also include benefits comprising HRA, LTA, and more.

The income bracket for taxpayers includes the slabs:

• Income of INR 2.5-5 lakhs - 5% tax
• Income between INR 5 - 10 lakhs - 20% tax
• Income above 10 lakhs - 30% tax

What is all about the new tax regime?

Introducing a new tax regimedate takes away the benefits of the older tax regime. For instance, the benefits and deduction provisions are not aplicable if you opt for the new regime.

In the new regime, the tax slabs comprise the following income ranges:

• Up to INR 2.5 lakh - No tax
• Withing INR 2.5 - 5 lakhs - 5% for the amount above INR 2.5 lakhs
• Within INR 5 - 7.5 lakhs - 10% for the amount above INR 5 lakhs with INR 12,500
• Within INR 7.5 - 10 lakhs - 15% for the amount on top of INR 7.5 lakhs plus INR 37,500
• Wihitn INR 10 - 12.5 lakhs - 20% of the sum exceeding the INR 10 lakhs in addition to INR 75,000
• Within INR 12.5 - 15 lakhs - 25% taxation for income above INR 12.5 lakhs along with INR 1,25,000
• Income above 15 lakhs - 30% of the sum above the INR 15 lakhs with INR 1,87,500

How to opt for the new tax regime if you have been on the older one?

To opt for the new tax regime, a taxpayer has to fill the Form 10IE and send it to the Income Tax Department. Taxpayers with business income must submit the form by 31 July ^st, as per the government's man, before filing the ITR submissions.

Salaried individuals need to submit the form before or at the time of ITR filing.

To fill the Form 10IE, you need to:

• Go to the income tax portal
• Select the Form 10IE
• Fill out details like PAN number, etc.
• Sign digitally
• Download the submitted form after completion

Conclusion

It's a wise decision to research thoroughly before filing taxes. If you want to know all about the question, 'Are you an option for the new tax regime?', following the notifications of the IT department is crucial. By assessing your current tax responsibility, you can switch to the new regime easily.

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Frequently Asked Questions

1. Can I select a new tax regime?

You can opt for the new tax regime after considering your source of income. Once decided, you need to fill out Form 10IE to declare your preference for the new regime.

2. When should I opt for a new tax regime?

You should opt for the new tax regime if your income is above INR 3 lakhs with deductions only under 80C of the IT Act. If you want to switch, you must declare it during the ITR filing as a salaried individual.