Govt should allow salaried employees to choose tax regime for TDS on salary again for FY2024-25
new tax regime in the July 2024 Budget, increasing its attractiveness compared to the old tax regime. This was done by changing the income tax slabs to reduce tax payable, hiking the standard deduction to Rs 75,000 and increasing the deduction to 14% on employer's contribution to the NPS account under the new tax regime.
However, these changes have been made in the new tax regime after almost 4 months of the financial year 2024-25 are already over. Salaried individuals have already informed, in April of this financial year, their employers about their individual choice of tax regime for deducting tax from their salaries. Employers use the tax regime chosen by the employees as the basis for calculating the TDS from each employee's salary. In the most cases, this choice has to be made in the first month of the FY as per employers' requirements. Each employee chose the tax regime favourable to him/her based on the income tax slabs under the old and new tax regimes existing at that point in time.
Latest income tax slabs in old, new tax regime for FY 2024-25
The changes in the income tax slabs under the new tax regime in the July Budget 2024 may have changed the tax regime favourable to some employees. Therefore, those who opted for the old tax regime in April 2024 may want to switch to the new tax regime for TDS on salary. This is because if their estimated tax liability as per the new tax regime is now lower than that estimated earlier under the old tax regime then TDS from their salary would also reduce if the
