New and Old Income Tax Regimes Explained as ITR Filing Deadline Extended

The government has recently extended the ITR filing deadline, giving taxpayers more time to choose between the new and old income tax regimes for the current assessment year. This decision offers welcome relief, especially for those still deciding which tax structure benefits them more. At Global Taxman India Ltd, we help you understand both regimes so you can make the most tax-efficient choice before submitting your return.

1. Old Income Tax Regime

The old regime is the traditional tax structure that allows taxpayers to claim multiple exemptions and deductions under the Income Tax Act, such as:

• Section 80C (up to ₹1.5 lakh for investments like PF, ELSS, LIC, etc.)
• Section 80D (medical insurance)
• HRA, LTA, and other allowances
• Interest on home loans (Section 24)

Pros:

• Ideal for those who have significant investments and expenses eligible for deductions.
• Offers more flexibility through multiple exemptions.

Cons:

• Slightly higher tax rates compared to the new regime.
• More documentation and proof of claims required.

2. New Income Tax Regime

The new regime, introduced in FY 2020-21, offers lower tax rates but removes most exemptions and deductions. The rates are slab-based with reduced percentages, making it simpler for taxpayers without significant investments or eligible expenses.

Pros:

• Lower tax rates in most income slabs.
• Minimal paperwork as deductions are not claimed.

Cons:

• No major exemptions like 80C, 80D, HRA, or LTA.
• May not be beneficial for those with high deductible expenses.

3. How to Choose the Right Regime

The choice depends on your income structure, deductions, and investment habits:

• If you have high deductions under 80C, 80D, HRA, etc., the old regime is usually better.
• If you have minimal deductions or prefer a simple process, the new regime may save you more tax.

Tip: Use an income tax calculator to compare both regimes before filing.

4. Extended ITR Filing Deadline – What It Means

With the deadline extended, taxpayers now have extra time to:

• Calculate tax liability under both regimes.
• Gather documents for deductions (if opting for the old regime).
• File accurately to avoid penalties under Section 234F.

File Your ITR with Global Taxman India Ltd

Whether you choose the new or old regime, accurate filing is essential to avoid notices and penalties. At Global Taxman India Ltd, our experts ensure:

• Correct regime selection for maximum savings.
• Error-free ITR filing before the extended deadline.
• Complete compliance with the latest income tax rules.www.globaltaxmanindia.com