Saturday, May 18, 2024

Salaried can switch tax regimes every year

New Delhi: While salaried employees can choose old or new personal income tax schemes every year, those with income from business or profession who once opted out of the new scheme with lower rates will have to continue in the opted scheme in subsequent years and can change her choice only once after that.

“A person not having income from business or profession can exercise this option every year,” Central Board of Direct Taxes (CBDT) said in an order citing Section 115BAC of the Income Tax Act. This section allows those without income from business or profession to make the choice every year although the default option would be the new scheme without exemptions.

CBDT also clarified that employers should seek information from each of their employees regarding their intended tax regime and each such employee should intimate the same to the employer who deducts tax at source accordingly.

If intimation is not made by the employee, it shall be presumed that the employee continues to be in the default new tax regime and has not exercised the option to opt out of it.

In such a case, the employer shall deduct tax at source accordingly. CBDT also clarified that the intimation to the employer would not amount to exercising the option to move out of the scheme and the person shall be required to do so separately as per law.

Experts said that employee’s intimation to the employer is only for the purpose of tax deducted at source (TDS) obligation and that the employee shall still have the option to choose old or new regime at the time of filing his tax return irrespective of the stand taken in such intimation furnished to the employer.

Catch all the Politics News and Updates on Live Mint.
Download The Mint News App to get Daily Market Updates & Live Business News.

More
Less

#Salaried #switch #tax #regimes #year

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Latest Articles