to choose between the existing income tax regime (availing benefits of tax
exemptions and deductions) and a new tax regime (lower income tax rates with no
tax exemptions and deductions) every year as per their convenience.
for the tax structure as per an individual’s convenience, there is one
condition that must be satisfied.
Condition that must be
choose between the existing tax regime and new tax regime every year. This
would mean that salaried individuals and pensioners would be eligible to switch
between new tax regime and old tax regime as per their convenience every year
provided they don’t have business income.
However, a consultant’s income is
charged as business income and not salary income. Therefore, individuals who
work as consultants will not be eligible to switch between the new and old
regime every year.
earn income from freelancing activities? Can they switch between the two
regimes on a year to year basis?
Unlike salaried individuals and
pensioners, who can choose between new tax regime and existing tax regime every
year as per their convenience, the individuals having business income such as
consultants or salaried individuals having income from their freelancing
activities do not have this option of choosing between the two tax regimes
What if I have business income
and opt for the new tax regime?
ceases to exist in future years? Will the individual then be able to choose
between the existing tax regime and the new one and that too as per his/her
convenience every year?
If an individual’s business income
ceases to exist in the future years, then they have an option to switch back
again to the new tax regime as per his/her convenience every year or they can
continue with old tax regime as well
Once the individual ceases to have
business income, the right to opt between the existing tax regime and new tax
regime in every financial year is activated. This brings parity between such
assessees and non-business income assesses