How to Switch to the Old Tax Regime While Filing Your ITR
Understanding the Old Tax Regime
India offers two tax regimes: the old and the new.
- The old regime allows you to claim a wide range of deductions and exemptions, such as:
- House Rent Allowance (HRA)
- Standard deduction
- Investments under Section 80C
- Medical insurance under Section 80D, and more
Many salaried taxpayers favor the old regime because these deductions significantly reduce their taxable income.
On the other hand, the new tax regime features lower tax rates but eliminates most exemptions and deductions. It’s ideal for those who don’t make tax-saving investments or prefer a simplified tax process.
Can You Switch to the Old Tax Regime While Filing ITR?
Yes, you can – but it depends on the type of income you earn.
| Type of Income | Can Switch While Filing ITR? | Form 10-IE Required? |
|---|---|---|
| Salary or Other Income | Yes, every financial year | No |
| Business or Professional Income | Only once after switching | Yes, before the ITR deadline |
If You Are a Salaried Individual:
You can switch between the old and new regimes every financial year. There’s no need to inform your employer or file any additional forms. Just choose the desired regime while filing your Income Tax Return (ITR).
If You Have Business or Freelance Income:
Switching is more restrictive. You must:
- Submit Form 10-IE before the ITR filing deadline.
- Once you switch to the new regime, you can revert to the old one only once in future years.
- After switching back, you’re permanently locked into the old regime unless your business income ceases.
Old vs New Tax Regime: Which One Should You Choose?
There’s no universal answer. The right regime depends on your income level, deductions, and financial planning.
| Scenario | Recommended Regime |
|---|---|
| You claim HRA, 80C investments, medical insurance, etc. | Old Regime |
| You don’t have major deductions or investments | New Regime |
| You’re self-employed or a freelancer | Depends – do the math |
You can use the official Income Tax Calculator to compare your tax liability under both regimes.
Quick Tip
Over 60% of salaried taxpayers still prefer the old regime because of the tax benefits offered through deductions.
Final Thoughts
If you’re a salaried taxpayer, switching to the old regime is straightforward—just select it while filing your ITR. For business owners or freelancers, make sure to file Form 10-IE on time if you’re planning to switch back.
Always compare both regimes before filing. Choosing the right one can help you save thousands in taxes.
Disclaimer:
This article is for general informational purposes only and does not constitute legal, financial, or tax advice. Tax laws are subject to change, and individual situations may vary. For tailored advice, consult a tax professional or refer to official government resources. The author and publisher disclaim liability for decisions made based on this content.
