The CBDT states that the employee can change the option of tax structure while filing the income tax return and the amount of TDS payment will be adjusted accordingly in the CBDT prescribed Form 10-IE given below the Option Form 10-IE is given below.
In the old Tax Slab, income up to Rs 2.5 lakh is exempt from personal income tax
The Income Tax Department said on Monday that employees need to inform their employers about their intentions in choosing a new tax system to enable them to reduce Tax when paying salaries.
The new income tax announced in the budget has the option of levying a lower rate of tax on individuals and Hindu Undivided Families (HUFs) unless certain exemptions and concessions like house rent allowance (HRA), interest on house rent are taken. , Under Section 80C, 80D and 80CCD, up to a total income of up to Rs.2.5 crore will be exempted under the investment.
In a statement, the Central Board of Direct Taxes (CBDT) said that any employee wishing to adopt the alternative of income tax exemption rate provided in the 2020 budget can know the deductor or his employer intimately for such purpose.
All Employers shall check their employee’s total income and deduction the TDS (tax deducted at source) in accordance with the provisions of Section 11B BAC of the (Income Tax) Act.
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The Central Board of Direct Taxes, however, said that the employee can change the tax structure option while filing the income tax return and the amount of TDS payment will be adjusted accordingly.
Whether TDS should be deducted under the new option or whether TDS should be deducted under the old regime, there is no clarity about the employers, as there is no appropriate change in the TDS provisions to enable deduction of TDS under any new option.
This notification will eliminate confusion among employers and ensure that employees have minimal discrepancies in TDS and ITR (income tax returns) if they take a consistent position in declaring alternatives to the employer and ITR (new or old) by them Selected.
Conclusion, it is clearly said that an employee (not just earning from business or occupation) can change the option once used for the purpose of deducting TDS but always change it when filing a tax return.