< >

Home > Income Tax > Help Center > New Tax Regime Last Updated: Feb 02nd 2023

Old vs New Tax Regime | Explained for Salaried & Business Tax Payers

Budget 2020 has announced a New Tax Regime (aka Alternate Tax Regime) u/s 115BAC which is applicable from FY 2020-21 (AY 2021-22). All individuals and HUF have an option to choose between Old regime (regular) or New regime depending upon their Income and Investments. What's different to the common belief is that it applies to both Salaried and Business taxpayers.

Know more on the Choice, Benefits, and the Limitations.

Old Vs New | Compare & Select the Best from

1. Tax Rates under New Tax Regime

The taxpayers are required to pay tax at concessional rates under New Tax regime (u/s 115BAC). The concessional tax rates under New Regime are as follows. If you want to know the difference between Old vs New Tax Regimes, refer Difference between Old Tax Regime and New Tax Regime

From FY 2023-24 (per Budget 2023)

S.NoSlab Tax Rates
1Upto Rs 3,00,000Nil
2From Rs 3,00,001 to Rs 6,00,0005%
3From Rs 6,00,001 to Rs 9,00,00010%
4From Rs 9,00,001 to Rs 12,00,00015%
5From Rs 12,00,001 to Rs 15,00,00020%
6More than Rs 15,00,00030%
Individuals and HUF opting New Regime u/s 11BAC are not liable to Alternate Minimum Tax (AMT)

From FY 2020-21 to FY 2022-23

S.NoSlab Tax Rates
1Upto Rs 2,50,000Nil
2From Rs 2,50,001 to Rs 5,00,0005%
3From Rs 5,00,001 to Rs 7,50,00010%
4From Rs 7,50,001 to Rs 10,00,00015%
5From Rs 10,00,001 to Rs 12,50,00020%
6From Rs 12,50,001 to Rs 15,00,00025%
7More than Rs 15,00,00030%
Individuals and HUF opting New Regime u/s 11BAC are not liable to Alternate Minimum Tax (AMT)

Quick Fact

  • When filing through the system will auto calculate both Old and New Tax Regime calculations for you to choose with the maximum refund eligible tax regime to eFile your IT Return.

  • Refer Income Tax Help Center for more information or when you are working in the IT Filing Service, go to "Summary" Page to see the comparison. while realtime calculation is available at the top of the screen.

Income Tax Calculator
Calculate your Income Tax using latest per Budget 2023

Income Tax Calculator (FY 2023-24)

For additional Tax Calculators, visit IT Help Center

2. Deductions / Exemptions not available under New Tax Regime (Other than Business)

If the taxpayer wants to opt for New Regime, certain deductions/exemptions would not be allowed. Following are the deductions/exemptions not available for taxpayers opting for new regime.

  1. 10(13A) – House Rent Allowance
  2. 10(5)- Leave Travel Concession
  3. 10(14)- Allowances to meet expenses relating to duties or personal expenses
  4. 10(16)- Standard Deduction, Professional Tax and Entertainment Allowance
  5. 10(17)- Daily Allowance or constituency allowance of MP’s and MLA’s
  6. 10(32)- Exemption in respect of income of minor child included in the parent
  7. 24(b)- Interest on Housing Loan
  8. 57(iia) – 15% Deduction in respect of Family Pension
  9. 80C to 80U except employer contribution to NPS u/s 80CCD (2)
  10. Free or concessional food and non-alcoholic beverages through paid vouchers and usable only at eating joints

3. Deductions / Exemptions not available under New Tax Regime (Business)

Following are the deductions /exemptions not available under New Tax Regime for the tax payers who are filing returns under Business

  1. 32(1) (iia)- Additional Depreciation
  2. 33AB-Tea/Coffee/Rubber development account
  3. 33ABA- Site Restoration fund
  4. 35(1)(ii), (iia), (iii) or 35(2AA)- Deduction in respect of contribution to notified universities/research associations.
  5. 35AD-Investment linked tax incentives for specified business.
  6. 35CCC- Deduction in respect of expenditure incurred on notified agriculture project.

4. Time Limit for exercise of Option under New Regime

While the general understanding from the Finance Ministry is that over the time, the department may sunset the old regime for good, the restrictions defined may confuse the taxpayers. Below is an effort to explain when to switch and the limitations.

  • 4.1 Individual / HUF with NO Business / Profession Income:
    If the individual has no business income, then the Individual / HUF can switch between the old and new over the years. The option has to be exercised on or before due date (even during the IT Filing time as long as it is before the due date) of filing Income Tax Return

  • 4.2 Individual / HUF with Business Income:
    The option of New Regime has to be exercised on or before due date of filing Income Tax Return and it would apply to subsequent assessment years once exercised. The option can be withdrawn only once and the Individual / HUF shall never be able to exercise option under this scheme again, except where such Individual or HUF ceases to have any business income.

As on 3rd Mar 2022, govt. is mulling to sunset the Old Tax Regime to strengthen the new tax regime and to reduce the compliance burden on taxpayers to plan and manage.

As on 1st Feb 2023, part of Budget 2023, govt. has given clear direction to eventually sunset the old tax regime and has made "new tax regime" a default when filing taxes in India. EZTax team has predicted this few years ago and was articulated in budget expectations for last 2+ years.

Hence decisions like home loan for the purpose of getting the tax saving would be discouraged unless you see other benefits of owning a home such as pride, confidence, and material benefit from rent vs buy comparison.

5. How New Tax Regime affects TDS on Salaries?

  1. The Taxpayers having income other than business income should disclose their intention to opt for new regime u/s 11BAC to their respective employers.
  2. If no declaration is made by the employee for opting new regime, the employer will deduct the taxes under Old Regime.
  3. The declaration made by the employee cannot be modified during the same year. It will be valid throughout the year.
  4. The declaration made to employer cannot be treated as exercise of New Tax Regime options.
  5. The option at the time of filing of Income tax return can be different from declaration made to employer.

Quick Fact

  • Declaration of Old or New Tax Regime to your employer and / or a tax consultant during the year is mainly to withhold the TDS appropriately.

    You have a choice to select Old or New Tax Regime at the time of IT Filing.

6. Forms required to be filed for opting New Tax Regime

CBDT has notified Form 10-IE. An Individual / HUF are required to fill and submit form 10-IE at the time of filing Income Tax Return if they want to opt for new regime for a particular financial year. The due date for submission of form 10-IE is same as filing income tax return i.e., July 31 unless extended.

The information in the Form 10-IE are already available part of the return and IT Return is a fact and having this form to be uploaded in addition to the IT Filing may add additional burden.

We @ assume that this requirement may be dropped soon and the ITD part of their new data exchange schema provide a facility for such as an additional questionnaire. If no such thoughts, we request the ITD to consider such measure to ease the process of filing.

6a. More on Form 10IE?

Refer Form 10IE for Opting New Tax Regime for more details.

6b. How to download Paper Copy of Form 10IE?

While the Form 10IE is available Online, you may refer to Department announced Form 10IE for different reasons and where Online form may not be possible to fill.

Download Form 10IE

7. Details required to be given in form 10-IE

The following information is required to be given in form 10-IE

  1. Name of individual/HUF
  2. Address
  3. PAN
  4. Financial year for which option is exercised.
  5. If the individual/HUF has any income from business/profession
  6. Date of birth
  7. Nature of business/profession (only if there is any business/profession)

8. Restrictions on Carry Forward Losses

Under New Tax Regime, certain losses are not allowed to be set off or carry forward. Following losses are not allowed.

  1. Set off of any loss under the head house property with any other head of income.
  2. Set off of any loss, carry forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to deductions / exemptions not available under new regime (mentioned above).

9. Frequently Asked Questions

1.Does the concessional rated under New Regime apply to incomes chargeable at special rates like STCG (15%), LTCG (10% / 20%) etc?

No, the concessional rates under New Regime does not apply to incomes chargeable at special rates.

2.Is rebate u/s 87A applicable to taxpayers opting New Tax Regime u/s 115BAC?

Yes, the rebate of Rs 12500 u/s 87A applicable to taxpayers whose Net Taxable income is less than Rs 5 Lakhs under Old Regime and New Regime

3.Can I Change my Tax Regime every year?

If your Income does not have Business/Profession Income, you can change the Tax Regime every year,

4.I am a Salaries employee and made declaration to my employer to deduct the taxes under New Regime. Later on, I realized that the Old regime will be more beneficial to me. Can I change the declaration?

No, the declaration made to employer cannot be changed in the same financial year.

5.I have opted for New Regime at the time of filing Income Tax Returns, and I forgot to file form 10-IE. Does it have any impact on taxes?

Filing form 10-IE within due date is mandatory to opt concessional tax rates under New Tax Regime. If Form 10-IE is not filed, the Income tax department will disallow the concessional rates and calculate the taxes under Old Tax Regime.

How to get help from

Our Tax Services

Online Income Tax Filing Time: ~7 mins
  • Comprehensive & Accurate > No limits.
  • Highly Secure > Peace of mind.
  • Maximum Deductions > Save on Taxes.
  • No more visits to Tax Consultants > Save Time & Money.
  • Real-time Tax Calculation
  • Available in both Web Browser & Mobile App

Start Now

GST Accounting Software Price: FREE for 1st year in India  refer pricing for other countries such as India, Australia, Malaysia, Nepal, Pakistan, Singapore, Sri Lanka, & UK

Easiest GST ready Accounting software

  • GST Compliant Invoicing
  • Online - Highly available
  • Quick Onboarding - Import your data from legacy
  • Personalization - Highly customized Invoicing
  • Drafts > Estimates > POs > Delivery Challans > Invoices > CR/DR Notes > RCs & All.
  • Barcode scanner Integration
  • Amazon, Flipkart Imports
  • Individual, or Bulk Payments - just a Click away
  • Multiple users can Book / Bill at the same time
  • Quick Invoicing, Auto Delivery, & Reminders
  • Multi-Channel GST returns preparation
  • Customized for Regular and Composition
  • AI Data Insights
  • AI Prioritization
  • AI Alerts
  • Expenses & Purchases
  • Real Time P & L
  • Barcode Scanner, e-Way Bill Integration
  • Excellent User Experience
  • Easy to understand language
  • Artificial Intelligence enablement
  • above all, Count on our Outstanding Client Service

Start NowLearn more
Tax Expert Services Price: Rs.799 onwards

  • Affordable Tax Services for Businesses, Associations, Individuals
  • GST Registration
  • GST Return Filing
  • GST Accounting
  • GST Consultation
  • Notice Handling
Income Tax
  • Income Tax Return Filing for Businesses, Associations, Individuals
  • Tax Savings
  • TDS Preparation
  • General Tax Compliance
  • Investment Advisory
  • Capital Gains Consultation
  • Tax Planning
  • Notice Handling
Virtual Accounting
  • Complete Accounting for Businesses, Associations, Individuals
  • Compliance & Accounting Portal Access for easy monitoring
  • Accounting Advisory
  • Tax Savings
  • GST, Income Tax, TDS, General Tax Compliance
  • Business Planning

Contact Now   WhatsApp Now