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The Finance Act 2023 has made the new tax regime as the default tax regime for FY 2023-24 (AY 2024-25). The taxpayers can switch between the old and the new tax regime on a year-on-year basis.
Taxpayers should note that the NPS-related deduction under Section 80CCD (2) of the Income-tax Act, 1961, is the only exemption allowed under both the tax regimes.
The Budget is crucial this year as it is the election year and the government holds the key. All eyes are on Finance Minister Nirmala Sitharaman on how the NDA government would balance the fiscal goals and electoral appeal.
Income Tax Returns: The Budget 2023 saw FM Nirmala Sitharaman announce multiple changes in the New Tax Regime. Individual taxpayers can make a switch from the Old Tax Regime to the New Tax Regime as many times as they want. But that's not the same for individual taxpayers with business income.
Deductions under New Tax Regime: Salaried individuals opting for the New Tax Regime can still claim many deductions. A few prominent ones are Standard Deduction and deduction under Section 80CCD (2) for employer's contribution to the National Pension System.