Income Tax News: The race for income tax starts when March finishes and April begins. Additionally, the process of saving taxes by sitting with a CA has begun. Some are doing calculations to save money under the new regime, while others are using the old regime to save money on home loans, 80C investments, insurance, and taxes on money acquired from the market.
Importance of Deadline Awareness
However, in the midst of all this activity, don’t overlook a crucial deadline or date. Should you over this threshold, you will not be eligible for any income tax exemption. even if you are receiving money from a savings account or paying home loan interest.
In actuality, we are discussing the Income Tax Return (ITR Filling) due for the 2023–2024 fiscal year, which has been set by the Income Tax Department at July 31, 2024. You will have the option to select the previous regime if you file your ITR before this deadline. The option to return to the previous system will not be offered to taxpayers after the specified date has passed.
Introduction of New Tax Regime
In 2019, the government enacted a new tax regime that offers no tax exemption of any type, notwithstanding lower income tax slab rates. Only after doing away with seventy different kinds of tax exemptions had the government put the new system into place. In addition, there is a direct tax exemption of Rs 3.50 lakh on house loan interest and principle, Rs 1.5 lakh under 80C, and Rs 75,000 on insurance, even if the slab rate was higher under the previous regime. You also receive tax exemption on other alternatives in addition to this.
Default Implementation of New Tax System
The new tax system has been imposed by default by the government starting with the 2023 budget. This implies that in the event that the investor selects no regime, the new regime will be used to calculate his earnings, and tax will be withheld at the appropriate rate. This implies that you will have to select the previous tax system on your own if you wish to benefit from tax exemptions on loans, investments, or other forms of allowances. To be eligible for this, returns must be filed by July 31st.
Late Filing Consequences
If a taxpayer fails to file his return by July 31st, 2024, he or she will have the opportunity to file a delayed ITR from August 1, 2024, until December 31, 2024. This implies that although these taxpayers will not be able to use the previous tax system, they will still be able to file their taxes and pay a penalty. Under the new regime, tax will be taken immediately from their earnings at the same rate in such a case.
