ITR Rules 2025: Every year, while filing Income Tax Returns (ITR), taxpayers face a common dilemma, should they choose the new tax regime or stick to the old one? In Budget 2023, the government made the new tax regime the default option, but taxpayers still have the choice to opt for the old tax regime if they prefer.

Now, the question is, can you switch tax regimes every year? Can business owners also change their tax regime annually? It is important to know the answers because your tax savings depend on it.

If your income comes from salary, interest, or rent (non-business income), you have the option to choose between the new and old tax regimes every year. This means if you chose the new tax regime last year, you can switch to the old one this year. However, you must decide before the ITR filing deadline (July 31, 2025). According to the Income Tax Department, you can opt for the old tax regime only if you file your return on time.

What are tax rules for business and professional income earners?

If you have a business or professional income, the rules for switching tax regimes are stricter. Taxpayers who earn from business or profession (including individuals, HUFs (Hindu Undivided Families), AOPs (Association of Persons), BOIs (Body of Individuals), or Artificial Juridical Persons) cannot switch tax regimes every year. If they choose the new tax regime and later switch to the old one, they can’t go back to the new regime again. They get only one chance to switch back.

According to Budget 2023, those who want to opt for the old tax regime must fill out Form 10-IEA before filing their ITR. This form confirms which tax regime they are choosing and whether they are eligible for it.

On the other hand, salaried individuals and those with non-business income can switch between the new and old tax regimes every year.  However, they must decide before the ITR filing deadline. If you want to choose the old tax regime, you must do so before the ITR filing deadline under Section 139(1) of the Income Tax Act.

ITR Filing 2025: Deadline and important dates

According to the Income Tax Department, taxpayers who do not require an audit must file their ITR by July 31, 2025 (for FY 2024-25, AY 2025-26). If someone misses the deadline, they can still file a belated return by December 31, 2025, but they will have to pay a late fee.

If you have already filed your ITR on time but later realise that you should have chosen a different tax regime, you can file a revised return. However, this option is available only to those who filed their ITR before the due date.

Which tax regime should you choose?

Before filing your ITR, it is important to decide whether the new or old tax regime is more beneficial for you.

The old tax regime offers various exemptions and deductions, such as:

• Section 80C (PPF, EPF, Life Insurance)
• Section 80D (Medical Insurance)
• HRA (House Rent Allowance)

The new tax regime has lower tax rates but does not allow most deductions and exemptions.