What happens if you fail to choose your tax regime? CBDT notice states

Taxpayers can also avail deduction against employer’s contribution to the Central Government Pension Scheme under both the regimes.

Income Tax: To make it more attractive for taxpayers, the government has made some changes in the new tax regime.

Finance Minister Nirmala Sitharaman announced that the new taxation regime imposed by the government would be in default from the financial year 2023-24. Taxpayers who wish to exercise the option old tax regime A declaration regarding the same has to be made in order to retain its tax benefits. But if you fail to choose between the old and the new tax regime, it will affect your Tax Deducted at Source (TDS).

TDS will be deducted for employees who fail to choose between new and old tax regime new regime Rates. The matter has become clear from a circular of the Central Board of Direct Taxes. “If the intimation is not given by the employee, it shall be deemed that the employee continues to be in the default tax regime and has not exercised the option to opt out of the new tax regime. Accordingly, in such a case, section 115BAC of the Employers’ Act shall deduct tax at source on the income under section 192 of the Act, at the rates provided under sub-section (lA) of the Act,” the notice said.

If the decision is not taken by the employee, the employer will be liable to deduct TDS at the new tax regime rates. The employer should inquire about the desired tax regime of his employees and deduct tax accordingly.

salaried employee There are many benefits one can get under both the tax regimes. They need to choose the regime that will provide them with maximum tax benefits.

To make it more attractive for taxpayers, the government has made some changes in the new tax regime. This includes providing a standard deduction of Rs 50,000 in governance. Earlier this deduction was available only in the old tax system.

Taxpayers can also avail deduction against employer’s contribution to the Central Government Pension Scheme under both the regimes.

Employees can also get exemption under section 87A if their taxable income does not exceed a specified amount in a financial year. Employees whose income is up to Rs 5 lakh will get Rs 12,500 as exemption under the old tax regime. Those opting for the new tax regime will get a rebate of Rs 25,000 on income up to Rs 7 lakh.

read all latest business news, tax news And stock market update Here