Can You Switch Between Old and New Tax Regime While Filing ITR? Here's What the Rules Say

As the deadline for issuing Form 16 approaches, many salaried individuals are preparing to file their Income Tax Returns (ITR) for the financial year. However, a common question continues to puzzle taxpayers: can you switch your tax regime while filing your ITR? If you initially opted for one regime with your employer, is it possible to change it later during return filing? Here's what the income tax rules clarify.

Understanding Old vs New Tax Regime

Since the introduction of the new tax regime under Section 115BAC, taxpayers now have the option to choose between the old regime (which includes various exemptions and deductions) and the new regime (with lower tax slabs but no deductions). This flexibility has left many confused, especially when it comes to switching between regimes at the time of ITR filing.

Can You Change Your Tax Regime While Filing ITR?

Yes, individual taxpayers can switch their tax regime while filing their ITR. Even if you’ve already communicated a preference to your employer during the financial year, you still have the freedom to choose the more beneficial regime while filing your return.

For example, suppose you initially chose the old regime and submitted your investment proofs accordingly. But after receiving your Form 16, you realize that the new regime results in less tax liability — you are allowed to switch to the new regime while filing your return. The same flexibility applies in reverse.

How to Make the Switch?

While filling out your ITR form, you will see a question:
“Do you wish to opt out of the new tax regime under Section 115BAC?”

• If you select "Yes", your return will be filed under the old regime.

• If you select "No", the system will default to the new regime.

This is a crucial step and should be answered carefully based on your actual income, exemptions, and overall tax outgo.

Important Condition for Switching Regimes

To avail this flexibility, you must file your ITR before the deadline. If you miss the due date and submit a belated return, then your return will automatically be considered under the new tax regime only. The option to switch will no longer be available.

What Are the ITR Deadlines for FY 2024-25?

• For taxpayers not subject to audit: The last date to file ITR is 31st July 2025.

• For accounts requiring audit but no international transactions:

  • Audit report due by 30th September 2025

  • ITR due by 31st October 2025

• If there are international transactions, then:

  • Audit report due by 31st October 2025

  • ITR must be filed by 30th November 2025

Bottom Line

The freedom to choose the most tax-efficient regime is a valuable benefit available to all taxpayers — but only if you file on time. Make sure to evaluate both regimes based on your income, investments, and applicable deductions before locking in your final decision while filing your ITR.