Lesson 3 of 3 · 6 min
Default, switching, and the fine print
What you tell your employer in April is not final. A salaried person re-chooses every year, while business income makes the choice far stickier.
The new regime is the default: do nothing and it applies. In April your employer asks which regime to use for TDS on your salary. That answer only decides how much tax is deducted month to month — the real choice is made in your ITR.
So if you told payroll one thing and the other regime turns out cheaper, you can still pick it when filing, as long as you file by the due date.
A regime choice through the year
April
Employer asks for your regime and investment declaration
This sets TDS for the year. It is a working assumption, not a commitment.
April to March
TDS is deducted from each salary under the regime you named
Declared deductions reduce old-regime TDS; unmade investments become a bill at filing time.
By 15 June
Form 16 arrives showing the regime payroll actually used
Check it — a payroll default you never noticed is a common surprise.
Filing season, usually by 31 July
You pick the final regime in the ITR itself
Salaried filers can choose fresh each year. Business income needs Form 10-IEA to opt for the old regime.
How sticky that choice is depends on your income type. A salaried person with no business income can switch regimes every single year.
Someone with business or freelance income can opt out of the new regime only once — they file Form 10-IEA to do it, and once they return to the new regime, the door back to the old one closes.
Which considerations apply to you?
Do you have business or freelance income?
Quick check
In April you told payroll 'new regime'. In July, while filing, the old regime turns out cheaper for you. Can you switch?
Match them up
Five terms the regime choice runs on
Pick a term, then pick what it actually means.
Pick a term on the left.
Check yourself
1 / 3
Kabir asks
In April you told payroll "new regime". In July, filing, the old regime turns out cheaper. What can you do?
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