You need to switch to the old tax regime from the new tax regime while filing the return in the old tax regime, as the new tax regime is the default tax regime. Before conducting the same, you must be aware of the specific rules that regulate the switch.
The rules to switch the tax regime relied on the income source of the taxpayers- salary or business/ profession.
Choosing the Right Tax Regime for You
If the taxpayers wish to save some amount of tax, then they can file tax under the old tax regime. While filing can be profitable for the taxpayer who chooses the new tax regime, therefore one naturally opts for the default tax regime.
Rules for Salaried Employees?
Every year, the salaried taxpayers are permitted to switch the tax regime from old to new and vice versa.
Concerning the switching between the two tax regimes, there is no restriction on the salaried employees, as they can do the same every year. But those who have business income cannot choose this flexibility.
What Rules Are to be Applied if You Have Business or Professional Income?
An individual with business or professional income under the income tax website is not qualified to opt between the two tax regimes each year.
Therefore, they shall only have one chance to switch to the new regime after they opt out of the new tax regime. And they shall not be able to choose the old tax regime in the future if they switch back to the new regime.
Before the filing deadline of the return, the choice of the old tax regime can be made u/s 139(1) of the IT Act.
If you opted for the old tax regime last year, it's important to note that the new tax regime will still be considered the default option this year.
For the past two years, the new tax regime has been established as the default option for taxpayers. It is important to note that any decisions made regarding the tax regime in previous years will not influence choices this time around. Taxpayers are required to select the old tax regime if they wish to opt out of the default setting.
Closing Remarks
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