Individual Taxpayers Given the Option to Choose Old or New Tax Regime
The Income Tax Department has issued a new order that affects employed individuals and companies. The order states that employers must ask their employees about their preferred tax regime in the current financial year. Based on this information, tax deduction (TDS) will have to be done on the income. Individual taxpayers have the option to select whether they want to remain in the old tax regime offering exemptions and deductions or follow the new tax regime.
No Exemptions in the New Tax Regime
The new tax regime, which was announced in the General Budget 2023-24, reduces the tax slab but does not offer any exemptions. In contrast, the old tax regime provides exemption under all sections. As a result, individuals must carefully consider their options before making a decision.
Employers Must Deduct TDS Based on Employee’s Choice
The Central Board of Direct Taxes (CBDT) issued a clarification regarding tax deduction on salary by employers in the current financial year. Employers must take information from each of their employees about their preferred tax regime. TDS will then have to be deducted as per the tax regime adopted by the employee. If an employee is unable to communicate their preferences, TDS will be deducted based on the new tax regime.
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Sorted points by DelhiBreakings.com team.
👉 Nirmala Sitharaman announced that individual taxpayers have the option to choose between the old tax regime and the new tax regime.
👉 The Income Tax Department issued an order for employed individuals and companies to ask about their preferred tax regime.
👉 Employers will have to deduct TDS according to the chosen tax regime of the employee.
👉 If the employee is unable to specify their preferred tax regime, TDS will be deducted as per the new tax regime.
👉 The new tax regime has no exemptions, while the old tax regime offers tax exemption under all sections.
👉 The Central Board of Direct Taxes (CBDT) issued a clarification regarding tax deduction on salary by employers in the current financial year.
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