New updates are continuously coming out from the government regarding tax. Taxpayers will have to pay their income tax under the new tax regime (NTR) from FY 2023-24. This means that if you have not chosen any particular tax regime, your income tax will be determined as per the new tax regime. People who have no business income. They can switch between the old and new tax regime every year.

Which tax regime to choose?

The new tax regime allows you to deduct tax at a lower tax slab rate. In return you have to miss out on most of the discounts. Salaried taxpayers will have to inform which tax regime they are opting for. Once the arrangement is chosen, they cannot change it in the same financial year.

The tax slab rate is low.

The tax slab rate is lower in the new tax system. You do not get the benefit of most discounts. In this, there is no exemption on investments made in PPF, NSC, ULIP etc. under 80C. For example, in the old tax regime, the 30 percent tax bracket was applicable once the income crossed ₹10 lakh. At the same time, in the new tax system it is applicable on ₹ 15 lakh.

Is the old system better or the new one?

Many taxpayers wonder whether the old system is better or the new one. Its decision depends on many things. What investments do you have? Which tax bracket do you fall in? This may vary according to the situation. For some people the old system may be better. At the same time, for others the new arrangement may make sense. For this you can find out this by using a tax calculator.

want to return to the old system

It may also happen that you have chosen the new tax system, but now you want to return to the old system. This is possible, but you can only make this change once. Taxpayers with business or professional income cannot switch between the two systems on an annual basis. Salaried taxpayers have to pay tax through monthly TDS.