Along with salaried individuals, professionals and consultants who earn their income from businesses can now opt for the old tax regime in the current financial year. The Central Board of Direct Taxes (CBDT) has revised its rules to implement the FY24 budget-proposed changes to the new income tax regime and to define the modalities for taxpayers who wish to transition from the old to the new regime.
According to the notification issued by CBDT, individuals willing to go for old tax regime will have to file a specific form before filing a return.
Consultants and professionals will need to fill the form 10-IEA in order to continue to benefit from the old tax regime.
It has also broadened the scope of the new tax regime to include individuals, Hindu undivided families, associations of persons (except a cooperative society), or bodies of individuals (incorporated or not), or an artificial juridical person.
From the current financial year onwards, the new tax regime has become the default tax system. Previously, Only salaried individuals were able to switch to the old tax regime, while professionals and individuals with business were not allowed to switch.
What Is The New Tax Regime?
The new tax regime offers six tax slabs, with zero tax for income up to Rs 3 lakh, and a tax rate rising by 5 percentage points for incremental income of Rs 3 lakh each.
The tax slabs are applicable for those with taxable income above Rs 7 lakh. There will be no tax for those with taxable income below Rs 7 lakh, as per announcement made in the Union Budget 2023. Just like the old tax system, the new scheme doesn’t allow to claim common exemptions.
