Can We Change Tax Regime While Filing ITR

Introduction

With the introduction of the new tax regime in India, taxpayers now have the flexibility to choose between the old and the new tax regime while filing their Income Tax Return (ITR). Many taxpayers often wonder, “Can we change tax regime while filing ITR?” The answer depends on various factors, including the type of income and the filing method.

In this article, we will explore whether you can switch tax regimes while filing ITR, the process involved, required documents, and how to file an income tax return effectively.

Also Read: ITR Filling Last Date

Understanding the Old vs New Tax Regime

Before discussing whether you can change the tax regime while filing ITR, let’s understand the two tax regimes:

Old Tax Regime

• Allows taxpayers to claim various deductions and exemptions such as HRA, 80C, 80D, etc.
• Suitable for individuals with higher deductions.

New Tax Regime

• Offers lower tax rates but eliminates most deductions and exemptions.
• Beneficial for taxpayers who do not have significant deductions.

Also Read: Income Tax Login

Budget 2025 Update

The latest Budget 2025 has introduced significant changes in the income tax structure. Individuals earning up to INR 12 lakh will not have to pay any income tax due to an increased rebate of INR 60,000 under the new tax regime. The revised income tax slabs for the financial year 2025-26 (assessment year 2026-27) are as follows:

Can We Change Tax Regime While Filing ITR?

Taxpayers often have questions about switching between the old and new tax regimes when filing their income tax returns. The ability to change tax regimes depends on whether the taxpayer has salaried income or business income. Salaried individuals can switch between the old and new tax regimes every year, while those with business income face restrictions on how frequently they can change.

1. Tax Regime Selection for Salaried Individuals

Salaried individuals with no business income have the flexibility to change their tax regime every financial year while filing their income tax return.

For example, if your employer deducted TDS based on the new tax regime, but you wish to opt for the old tax regime, you can do so while filing your ITR.

2. Tax Regime for Business Income

Individuals with business income (self-employed, freelancers, professionals) must follow specific rules:

• Once they choose the new tax regime, they cannot switch back to the old regime unless they opt out permanently.
• The option to change tax regimes is available only once in a lifetime for taxpayers with business income.

3. Process of Changing Tax Regime While Filing ITR

If you are eligible, follow these steps:

1. Login to the Income Tax e-Filing Portal.
2. Select the appropriate ITR form (ITR-1, ITR-2, ITR-3, etc.).
3. Choose your preferred tax regime while filing the return.
4. Review your tax liability and confirm the selection before submission.

Documents for Income Tax Return

To file an accurate ITR, you must have the following documents for income tax return:

1. Basic Documents:

• PAN Card
• Aadhaar Card
• Bank Account Details

2. Income-Related Documents:

• Form 16 (for salaried individuals)
• Salary Slips
• Rental Income Details (if applicable)

3. Investment and Deduction Proofs:

• LIC, PPF, ELSS, NSC, and other 80C investments
• Health Insurance Premium (Section 80D)
• Home Loan Interest Certificate
• Education Loan Interest Proof (80E)

4. Business and Freelance Income Proof:

• Profit & Loss Statement
• GST Returns
• TDS Certificates (Form 16A)

Having these documents handy will ensure smooth and error-free filing of your ITR.

How to File an Income Tax Return?

Filing an income tax return is a crucial financial responsibility. Here’s a step-by-step guide to help you:

Step 1: Gather the Required Documents

Ensure you have all necessary financial and personal documents before proceeding.

Step 2: Log in to the Income Tax e-Filing Portal

Visit the official Income Tax Department website https://www.incometax.gov.in and log in using your PAN and password.

Step 3: Select the Appropriate ITR Form

Choose the correct ITR form based on your income sources:

• ITR-1: For salaried individuals with income up to INR 50 lakh.
• ITR-2: For salaried individuals with capital gains.
• ITR-3: For professionals or business owners.
• ITR-4: For presumptive taxation scheme filers.

Step 4: Choose Your Tax Regime

If you are eligible, select your preferred tax regime (old or new) before proceeding with the return filing.

Step 5: Fill in the Details and Verify

• Enter income details manually or upload Form 16 for auto-population.
• Verify deductions, exemptions, and tax calculations.
• Ensure all details are correct before proceeding.

Step 6: Pay Any Tax Due

If there is an outstanding tax amount after deductions and TDS, pay it via challan 280.

Step 7: Submit and Verify ITR

• Submit the return and e-verify it using Aadhaar OTP, Net Banking, or DSC.
• E-verification is mandatory to complete the filing process.

Also Read: Input Credit Tax

Common Mistakes to Avoid While Filing ITR

To ensure a hassle-free filing experience, avoid these mistakes:

1. Choosing the Wrong ITR Form – Leads to rejection of the return.
2. Not Verifying ITR – The process remains incomplete without e-verification.
3. Claiming Incorrect Deductions – Double-check deductions to avoid penalties.
4. Ignoring Bank Interest Income – Even savings account interest is taxable.
5. Mismatched Form 26AS and ITR – Ensure TDS details match your Form 26AS.

Conclusion

So, can we change the tax regime while filing ITR? Yes, but it depends on your income type. Salaried individuals can switch regimes annually, whereas business owners can change only once in a lifetime.

By understanding the eligibility criteria, required documents, and the process of filing an income tax return, taxpayers can optimize their tax liability efficiently. Make sure to file your ITR accurately and on time to avoid penalties and ensure compliance with tax laws.

For a seamless experience, keep your documents for income tax return ready and follow the steps outlined in this guide. If you are unsure about tax regime selection, consult a tax expert to make an informed decision.