𝗜𝗻𝗰𝗼𝗺𝗲 𝗧𝗮𝘅 𝗥𝗲𝗴𝗶𝗺𝗲 𝗦𝘄𝗶𝘁𝗰𝗵𝗶𝗻𝗴 𝗥𝘂𝗹𝗲𝘀

𝗜𝗻𝗰𝗼𝗺𝗲 𝗧𝗮𝘅 𝗥𝗲𝗴𝗶𝗺𝗲 𝗦𝘄𝗶𝘁𝗰𝗵𝗶𝗻𝗴 𝗥𝘂𝗹𝗲𝘀

Taxpayers have different rules for switching between the new and old income tax regimes. The ability to change regimes depends on the source of income.

Rules for individuals without business or professional income:

• These taxpayers can choose between the new and old tax regimes every year.
• The new tax regime is the default option.
• Flexibility allows for annual switches based on financial changes.

Rules for individuals with business or professional income:

• Choosing the old tax regime is binding for future years.
• A taxpayer can withdraw this choice only once.
• The option to switch becomes available again if the individual stops having business or professional income.
• This restriction exists to maintain continuity for factors like depreciation and carried-forward losses.

Important deadlines and details:

• Taxpayers must file their tax return by the July 31, 2026 deadline to opt for the old regime.
• Late tax returns automatically move the taxpayer to the old tax regime.
• Section 115BAC applies to the income tax return for FY 2025-26.

Source: The Times of India