Each financial year taxpayers without business income can switch between the traditional and modern tax systems during their Income Tax Return submission. Strategic deduction implementation enhances the ability of this tax flexibility to provide valuable savings opportunities.

The new and old tax regimes provide a Section 24(b) deduction for the interest resulting from home loans obtained for rental properties. The deduction on home interest for homeowners covers all amounts without maximum constraints which creates extensive tax-saving potential.

Individuals who select the new tax regime can use the old system as long as their total tax obligation under the previous system is reduced than under the new system. You have one opportunity to switch back to the old tax regime from the new one only when your business or professional income is involved after making your selection for the new tax system. The new system becomes unavailable as soon as someone chooses it because this option stays locked in permanently.

A review of the Annual Information Statement (AIS) should always be your approach to understanding fixed deposit (FD) interest better. You will obtain your original investment as well as gain interest benefits when your FD matures. You prevent the situation of double taxation at the maturity date by having paid annual tax on accrued interest. The lack of previous accrued interest reporting will result in your full interest payment fetching higher taxes at the time of reception.