Old & New Tax Regime: Resolving Tax Saving Puzzle For FY24

In case if taxpayers do not inform their employers about the tax regime they have chosen, TDS will be decided as per the new tax regime

- MONIKA YADAV

THE changes in the new tax regime as announced in the Budget will be applicable from the current financial year 2023-24.

So, it is crucial for all the taxpayers to plan well in advance, as the new tax regime has been made the default option.

It is to be noted that the tax deducted at source (TDS) will be decided as per the new tax regime if employees do not inform their employers about the tax regime they have opted for.

Tax department allows a salaried individual to select either of the tax regimes for the purpose of TDS on salaries. After they have finalised the tax regime, they cannot change it during the financial year. However, they can choose another tax regime at the time of filing their income tax return.

Deciding old vs new regime

The government announced several changes in the new tax regime to make it more attractive. It is very important for the taxpayers to analyse both the regimes to make a well-informed decision. The takehome salary will get affected if the salaried individual doesn't do the right calculation. There is no change in the old tax regime, while in the new tax regime, income has been exempted up to 7 lakh per annum.