Nirmala Sitharaman: 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.
Old vs New Tax Regime: If you also do a job, then this news is useful for you. A new order has been issued by the Income Tax Department for employed people and companies. On behalf of the Income Tax Department, it was said that the employer will have to ask the employees about their preferred tax regime in the current financial year. Accordingly, tax deduction (TDS) will have to be done on the income.
Individual taxpayer has the option to select
It was said by the Income Tax Department that if the employee is unable to tell the employer the tax regime of his choice. In such a situation, the employer will have to deduct TDS from the salary as per the new tax regime announced in the General Budget 2023-24. 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.
Let us tell you that there is no exemption in the new tax regime, in the general budget presented on February 1, 2023, Finance Minister Nirmala Seetharaman had talked about reducing the tax slabs in the new tax regime and making it the default tax regime. Tax is less in the new tax regime but there is no exemption. In the old tax regime, you get tax exemption under all the sections.
The Central Board of Direct Taxes (CBDT) issued clarification regarding tax deduction on salary by employers in the current financial year. According to the clarification, the employer will have to take information from each of its employees about their preferred tax regime. Also TDS will have to be deducted as per the tax regime adopted.
