TDS on salary of these employees will decrease and others may get the option to join this group

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Logically, employers should provide employees the option to choose between the old and new tax regime for TDS from salary again. In most cases, this exercise is already over in the first few months of the current FY. However, the changes made in the income tax slabs under the new tax regime may lead to your employer providing you the option to choose between the old and new tax regime again for the purpose of TDS on salary. This is because the changes made in the income tax slabs of the new tax regime are effective from April 1, 2024 for the current FY 2024-25.

The new income tax slabs will change the income tax calculations for salaried and other taxpayers. This may change the tax regime favourable to them. Consequently, employees should be allowed to choose the tax regime for TDS on salary again to lower their tax outgo for current financial year. This year, in April 2024, when employers asked for employees’ preferred tax regime, the income tax slabs under the new tax regime were different than those announced in the Budget 2024.

Also, the announcements have been made at the end of July, after one quarter of the current financial year has already passed and tax on salary has already been deducted for the first few months of the FY.

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