ITR Filing 2025: Can You Change Your Regime While Filing Income Tax Return?

Taxpayers are preparing to file their income tax returns (ITRs) for the financial year 2024-25 (Assessment Year 2025-26). It’s also time for salaried employees to keep their documents ready for ITR filing, as the employers generally issue the Form 16 in June. Choosing the right tax regime could be helpful for taxpayers in significantly reducing their overall tax burden for FY 2024-25 (AY 2025-26).

As the deadline for filing income tax returns (ITR) approaches, many taxpayers find themselves facing an important question: Can I switch my income tax regime at the time of filing my return? The answer, in most cases, is yes.

Let’s take a look at all the key details you should take into account before selecting the appropriate option from the old and the new tax regimes.

The old tax regime allows taxpayers to claim various exemptions and deductions for tax-saving investments, health insurance premiums and house rent, among others. However, the old tax regime comes with higher tax rates and limited tax slabs.

On the other hand, the new tax regime has become the default regime from FY 2023-24. Introduced in Budget 2020, the new tax regime offers simplified tax slabs and lower tax rates with limited deductions.

Yes, salaried individuals can switch their chosen tax regime at the time of filing the return, regardless of the regime they had declared to their employer for TDS (Tax Deducted at Source) purposes. The TDS deduction throughout the year is based on the regime you opted for at the beginning of the financial year. However, the final tax liability will be determined by the regime you select while filing your ITR.

For example, you might have opted for the old regime and submitted proof of deductions to your employer. But if a review of your income and deductions reveals that the new regime offers a better tax outcome, you are allowed to switch to it while filing your ITR, and vice versa.

While salaried individuals have the flexibility to switch between the old and new tax regimes every financial year, those earning income from business or profession are allowed to make this switch only once in their lifetime.

The income tax return forms now specifically ask whether you’re opting out of the new regime under Section 115BAC. If you select “Yes,” your return will be filed under the old regime. If you select “No,” you’re confirming your choice of the new regime.

If you wish to switch to the old tax regime, ensure your ITR is filed on or before the due date, which has been extended till Sept. 15, 2025, for individual taxpayers who don’t need a tax audit. The ITR filing deadline was July 31 earlier.

If you miss the deadline and file a belated return, you can only file under the default new tax regime.

In conclusion, salaried individuals have the flexibility to switch tax regimes while filing their returns. But those with business or professional income need to tread cautiously, as the choice could have long-term financial implications.