Can You Change Tax Regime While Filing ITR?

Can You Change Tax Regime While Filing ITR?

Many salaried taxpayers choose their tax regime (old vs. new) early in the financial year for TDS purposes. But what if you realise later—while preparing your Income Tax Return (ITR)—that the other regime saves more tax?

Here’s the good news: you can change your tax regime while filing your ITR, but only if you file it before the due date.

What the Law Says – Section 115BAC

Section 115BAC of the Income Tax Act governs the new tax regime. As per current rules:

• The new regime is the default.
• If you want to opt out and go for the old regime, the ITR form asks:
  “Are you opting out of the new tax regime under Section 115BAC?”
  If you click ‘Yes’, you choose the old regime.
  If you click ‘No’, you stay in the new one.

Due Date Matters: You Can’t Change Later

Here’s the catch:
You can change your regime only if you file the ITR on or before the due date.

Regime Switch: Salaried vs. Business Income

• Salaried individuals can switch between old and new regime every year.
• Business owners/professionals (who have income under “PGBP”) can switch regimes only once unless they stop having business income.

This restriction is based on Section 115BAC(5).

Step-by-Step: How to Change Tax Regime While Filing ITR

1. Log in to the Income Tax e-filing portal.
2. Choose the applicable ITR form (e.g., ITR-1, ITR-2).
3. Go to the “Personal Information” section.
4. Respond to: “Are you opting out of the new regime?”
5. Select “Yes” for old regime, “No” for new regime.
6. Complete your filing and verify within timelines.

Practical Insight

If your deductions (80C, HRA, etc.) are high, old regime may suit better.
If not, new regime’s lower slabs + no deductions could reduce tax burden.
Always compare both regimes after finalising your income and deductions.

Government Clarification

CBDT has clarified this option multiple times.