Did you intend your taxes for the present evaluation 12 months (AY2022-23) as per the brand new tax regime however missed submitting the earnings tax return (ITR) by the 31 July deadline? Well, you might be in for an disagreeable shock. Income Tax (I-T) legal guidelines don’t enable taxpayers to file belated ITR beneath the brand new tax regime, which might imply that each one belated ITRs need to be mandatorily filed as per the outdated regime.
“The I-T division has taken away the advantage of decrease taxes through the brand new regime in returns filed belatedly in order to encourage taxpayers to file throughout the deadline,” said Karan Batra, founder and CEO, charteredclub.com. Tax rates under the new regime are lower for incomes up to ₹15 lakh.
Things will get complicated for those taxpayers who have paid their advance tax or asked their employer to calculate TDS liability as per the new tax regime as they are most likely looking at a higher tax liability now. “In such cases, it can result in changes in the tax liability, which taxpayers will have to adhere to,” mentioned Deepak Jain, chief government, TaxSupervisor.in, a tax e-Filing and compliance administration portal.
Mint solutions among the key questions that this tax rule raises.
1. I opted for the brand new tax regime within the final evaluation 12 months. Do I nonetheless have to file belated ITR beneath the outdated regime this 12 months?
It will fluctuate relying on whether or not you’re a salaried taxpayer or have earnings from enterprise or occupation. The former is required to pick between the 2 regimes yearly whereas submitting their ITR. Salaried people who opted for the brand new regime within the final evaluation 12 months and are submitting a belated returns this 12 months is not going to have the choice to proceed with the brand new regime this 12 months. They must file their tax returns beneath the outdated regime.
Rules are completely different for self-employed people. “Taxpayers who’ve earnings from enterprise or occupation have to decide on the regime solely as soon as and may proceed in the identical regime even when they file a belated return. Therefore, this rule impacts taxpayers with earnings from enterprise or occupation solely within the first 12 months, whereas different taxpayers get affected yearly,” said Prakash Hegde, a Bangalore-based chartered accountant.
2. On my request, my employer deducted tax at source as per the new tax regime. Can I get Form-16 changed?
While, technically, you can get your Form 16 revised, this request may face practical challenges. “It is unlikely that the employer would agree because there may be interest and late filing fees payable by the employer,” mentioned Neeraj Agarwala, Partner, Nangia Andersen India.
Batra suggests utilizing earnings tax calculator obtainable on the IT web site to calculate the brand new tax legal responsibility. “Alternatively, when the taxpayer fills in all the data within the ITR, they’ll be proven the ultimate tax legal responsibility together with the relevant curiosity and costs,” he mentioned.
3. I’ve paid advance tax as per tax legal responsibility calculated beneath the brand new regime. What ought to I do?
You have to calculate your tax legal responsibility once more as per the outdated regime and pay extra tax, if any. Take be aware that if extra tax legal responsibility arises, you’ll have to pay 1% curiosity beneath part 234C for delay in paying advance tax.
“This will kick in from the primary instalment of advance tax, i.e., 15 June, and is calculated in proportion to the tax due,” mentioned Jain.
This curiosity is over and above the 1% curiosity that taxpayers need to pay on excellent tax beneath part 234A for defaulting on ITR submitting throughout the due date. Effectively, you probably have excellent tax, you’ll pay 2% month-to-month curiosity on it put up 31 July.
4. I didn’t make any tax-saving investments as I needed to go for the brand new regime. Are there any tax breaks that I can now declare?
There are sure expenditures that qualify for tax deductions. Medical bills as much as ₹50,000 of uninsured dad and mom aged 60 years and above and as much as ₹5,000 spent on preventive well being check-ups of self, partner, kids or dad and mom could be claimed as deduction. Preventive well being check-ups fall beneath the general ₹25,000 ceiling of part 80D.
Apart from these, stamp responsibility and registration payment on home buy and youngsters’s tuition payment (for each faculty and school) could be claimed beneath part 80C ₹1.5 lakh restrict. Donation, too, qualifies for deduction beneath Section 80G.
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