ITR filing FY 2025-26: Can you switch between new and old income tax regime every year?

ITR filing FY 2025-26: A prime betwixt the aged and caller income taxation authorities is an important 1 - which 1 saves you much tax? But the reply to that tin alteration each year. You whitethorn person conscionable bought a house, making the aged income taxation authorities much lucrative for the deduction and exemption benefits it offers.

Your location indebtedness whitethorn person been repaid, reducing the request for higher deductions and exemptions, hence making the caller taxation authorities amended for you.But, the question that needs to beryllium answered is: if your taxation authorities prime tin alteration each year, depending connected your fiscal concern and signifier of life, tin you power betwixt regimes each twelvemonth arsenic well?

ITR filing: Can an idiosyncratic power betwixt caller and aged taxation authorities each year?

The caller income taxation authorities is the default authorities applicable for idiosyncratic taxpayers.

Taxpayers clasp the flexibility to opt for the aged taxation regime, but the frequence depends connected the quality of the taxpayer’s income.Also Read | ITR filing FY 2025-26: What documents are required to record your income taxation return? Quick checklistRicha Sawhney, Partner Tax, Grant Thornton Bharat LLP explains that for individuals having concern oregon nonrecreational income, the determination to opt for the aged taxation authorities is binding for consequent years erstwhile exercised. There is simply a proviso to retreat this option, however, it tin beryllium done lone once.

An objection applies wherever the idiosyncratic ceases to person concern oregon nonrecreational income.In contrast, individuals not having concern oregon nonrecreational income bask greater flexibility, arsenic they tin opt betwixt the caller and aged taxation regimes each year. This efficaciously allows them to power regimes annually.“Given these considerations, it is advisable for taxpayers to cautiously measure the imaginable taxation benefits and savings nether each authorities earlier making a choice,” Richa Sawhney says.

Yet different origin to retrieve is that you tin opt for the aged income taxation regime, lone if you record your taxation instrumentality wrong the July 31, 2026 deadline. Any belated taxation instrumentality volition automatically power you to the aged taxation regime.Richa Sawhney, Partner Tax, Grant Thornton Bharat LLP says, “The favoritism betwixt the 2 categories of taxpayers reflects a considered argumentation choice. While individuals without concern oregon nonrecreational income tin revisit the prime betwixt the aged and caller taxation regimes each year, those having concern oregon nonrecreational income are taxable to a acold tighter framework.

This is understandable because, successful concern cases, the taxation presumption is seldom confined to a azygous year; respective factors specified arsenic depreciation and carried-forward losses often person continuing implications.

”“Viewed successful that context, the intent of the regularisation seems to beryllium to guarantee continuity and certainty portion discouraging predominant switching for year-specific taxation advantage. In essence for taxpayers with concern income, it becomes a much strategical and longer-term prime alternatively than a year-by-year decision,” she tells TOI.Note - While the aged and caller Act provisions related to the caller taxation authorities are the same, Section 115BAC volition use to the forthcoming instrumentality of income for FY 2025-26 which volition beryllium filed successful July/Aug 2026.Also Read | ITR filing FY 2025-26: What is Form 26AS & what if it has errors? Things taxpayers should bash to debar getting a taxation notice