FAQs – Income Tax options for 2023-24

General: Dates, guidelines, and more

1. Why is the new tax regime considered as the default regime for all professionals?

As per the Finance Bill 2023, the New Tax regime will be considered as default for the new FY
23-24. However, the professionals still have an option to opt for the old tax regime on HR
Workways when the window opens in April 2023. Watch out for further communication on
this from Info Ceridian when the window opens.

2. What are the changes in the income tax slabs and rates under the old and new tax regime?

The following Income Tax slab rates have been notified in the Union Budget 2023 -

Income Tax slab Old tax regime Income Tax slab rates
New tax regime (in %)
rates (in INR) (in %) (in INR)

Up to 2,50,000 Nil Up to 3,00,000 Nil

2,50,000 - 5,00,000 *5 3,00,000 - 6,00,000 *5

5,00,000 - 7,50,000 *20 6,00,000 - 9,00,000 *10

7,50,000 - *20 9,00,000 -12,00,000 *15

10,00,000

10,00,000 - *30 12,00,000 - 15,00,000 *20

12,50,000

12,50,000 - *30 N/A N/A

15,00,000

15,00,000 – *30 15,00,000 – 50,00,000 *30

50,00,000

50,00,001 – 1 *30 (plus 10% 50,00,001 – 1 Crore *30 (plus 10% surcharge)
Crore surcharge)

1 Crore – 2 Crore *30 (plus 15% 1 Crore – 2 Crore *30 (plus 15% surcharge)
surcharge)
2 Crore – 5 Crore *30 (plus 25% 2 Crore – 5 Crore *30 (plus 25% surcharge)
surcharge)

Income Exceeding *30 (plus 37% Income Exceeding 5 crore *30 (plus 25% surcharge)
5 crore surcharge)

• In the new regime, all commonly available tax exemptions (such as those under
Section 80C, 80D, LTA, HRA, professional tax, housing loan interest etc.) will not be
applicable.
• Health and education cess and surcharge on income tax payable remains the same in
both regimes.
• Health and education cess at the rate of 4% is levied on the income tax plus surcharge
as applicable. Surcharge on income tax will also be added as per the income slab
applicable to the professional.

3. How can I change my tax regime?

• Visit HR Workways between April 10 – April 20, 2023

• Go to ‘My transaction’ >> ‘Investment Declaration’
• Click on each of the ‘+’ on left hand side to expand the sections and add your
investment details (if any)
• The computed sheet will consider the declarations and calculate the approximate tax
deduction under both the regimes. This will not consider the tax benefit for Sodexo
meal card (if opted in) for the monthly load.
• Analyze your financials and decide which option you would like to proceed with.
• Submit your tax regime choice by selecting the appropriate radio button.

4. By when do I need to declare my option?

The window to submit the choice of your tax regime will open on HR Workways from April
10 – April 20, 2023. The required action must be completed by April 20, 2023. The window
will not be opened anytime later in the FY 23-24.

5. From when will my tax regime choice be effective?

• Once submitted, this option will be calculated beginning your April 2023 salary.
• You will see it reflect in your April 2023 payslip.
• This option cannot be changed until the end of this financial year i.e. March 31, 2024.
 6. How will my salary be processed in April 2023?

If you choose to continue with the new regime, the new tax rates will be applied on gross
taxable income of the complete financial year effective April 2023. None of the old
investment declarations (if any) submitted on HR Workways will be considered for tax
exemption.

If you choose to opt for the old regime, your salary will be processed as usual considering
the investments that you declare on HR Workways in April 2023 and other tax benefits as
applicable.

7. What if I don’t submit my preferred option on HR Workways?

If no action is taken on the porta by April 20, income tax will be calculated as per the New
tax regime for the entire FY until March 31, 2024.

New hires, inter-entity transfers, and on-site professionals

returning to India offices
1. How should new hires who join the organization during the financial year submit their
choice? Can they opt for a regime different from the one followed in their previous
organization?

New hires who join in the new financial year have an option to choose either of the tax
regimes in the first month of their joining the firm (between 2 and 18 of the month). This
can be different from the one followed earlier in their previous organization (if any). If no
option is submitted, the new tax regime will be considered for processing the payroll till
March 2024.

The previous employer’s income will be considered accordingly as per the tax regimes
followed earlier and the one chosen by the professional in Deloitte. The treatment will vary
for each one of them.

Note: In the case of inter-entity transfers within Deloitte, the chosen tax regime in April,
will continue to be applied.
 2. Should professionals moving within entities or onsite location at Deloitte submit the choice
of tax regime again under the new entity or when they return to USI?

The option submitted in April 2023 will be considered as the final option for all onsite
professionals or those moving within entities.

Professionals on rotation must access the window in April and submit their desired option.
This option will by default be effective their first payroll processed in USI in current
financial year. They will not get an option to choose the regime upon their return to USI.

3. I am currently on an international assignment in US/ Member Firm. Do I still need to

submit my choice now on HR Workways? Can I change it upon my return to USI?

You must access the window and submit your desired option in April. This option will by
default be effective your first payroll processed in USI in current financial year. You will not
get an option to choose the regime upon your return to USI.

Changing your tax regime

1. Can I change my regime option while filing my individual tax returns?

This option cannot be changed at Deloitte until the end of this Financial Year i.e., March 31,
2024.

However, an option to choose any of the tax regimes is available to the individual at the
time of filing returns of income for the FY 2023-24. The option submitted on HR Workways
will not be considered as the final option under section 115BAC (5).

While you can choose to change your option while filing your income tax returns, moving
from the new regime to the old regime won’t let you avail all the benefits– as some
benefits such as LTA can be claimed only with the employer. However, it will be easier to
move from the old tax regime to the new one, while filing your income tax returns. This will
only require the addition of all deductions claimed with your employer to your annual
earnings.

This option will be considered as final by the Income Tax authority under the law. The
guideline clarifies that option exercised at the time of filing of return of income under
 subsection (1) of section 139 of the Income Tax Act can be different from the option chosen
by such individual with his/her employer for the previous year.

2. If I have filed for returns for FY 23-24 basis one of the regimes, will I be able to change my
option in the future?

If you have no other business income, you may opt in or opt out.

However, if you have other business income and opt out of the new regime while filing
returns, you will not be able to revert to the new regime.

3. I erroneously submitted the wrong option in April 2023. Can I change it next month?

Professionals have the option to make changes to their choice of regime any number of
times within the window of April 10, 2023 to April 20, 2023. The latest submission will be
considered to process the payroll effective April 2023.

No changes can be made post April 20, 2023.

Exemptions
1. What are the various exemptions and deductions unavailable under the new tax regime?

OLD NEW
DESCRIPTION
REGIME REGIME
Sec 10 Exemptions
Leave Travel Allowance under Sec 10(5) Allowed Not allowed
Gratuity under Sec 10(10) Allowed Allowed
House Rent Allowance under Sec 10(13A) Allowed Not allowed
Exemptions of certain Allowances under section 10(14) like
Not
Children Education Allowance, Hostel Allowance, Uniform Allowed
Allowed
Allowance etc.,
Sec 16 Deductions
Standard Deduction of INR 50,000 Allowed Allowed
Tax on Employment under Sec 16 Allowed Not Allowed
Chapter VIA Deductions
 Chap VI Deductions - 80C, 80CCC, 80CCD(1), 80CCD(1B),
80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80U, 80TTA, Allowed Not allowed
80TTB, 80G etc.,
Sec 24(b) Benefits
Allowed under
Interest on borrowed Housing Loan for a Self-occupied
Allowed special
Property
conditions only
Set off any loss from House Property to any other head Allowed Not allowed
Interest paid towards Housing loan - For Income from Let-
Allowed under
out property **(Intra-head set-off of losses allowed in case
Allowed special
of income from Let-out property, but loss cannot be set-off
conditions only
with the other head of Income in new regime)
Standard Deduction on income from rented out property at
the rate of 30% Allowed Allowed

Sodexo meal allowance (if opted in for the card load) Allowed Not allowed

2. What amount of tax rebate is allowed under each of the tax regimes?
• Old tax regime - Tax rebate for Income up to INR 5,00,000 is INR 12,500
• New tax regime - Tax rebate for Income up to INR 7,00,000 is INR 25,000

3. Can I submit my tax saving bills for expenses incurred on fuel and maintenance,
communications, and LTA under the new regime?

Under the new regime, you cannot claim LTA expenses. As the Income Tax guidelines, you
can still submit tax saving bills for fuel and maintenance and communications on HR
Workways as per the tax saving guidelines

The eligibility amounts for claiming the tax saving bills will remain the same in both regimes.

4. Will my Voluntary provident fund (VPF) contributions, Sodexo meal card (if opted in) and
premium for enhanced medical insurance be considered for tax benefit under the new
regime? If not, will I be given the option to opt out of these programs now?

None of the above qualifies for tax benefit under the new tax regime.

See the opt out guidance for each as below:

 • VPF: Option to opt out available ONLY between April 10 to 20, 2023
• Medical Insurance: No option to opt out
• Sodexo meal card load: Next window to opt out opens in June 2023

5. Will the housing loan interest (loss) related to both self and let out properties be
considered for proving the tax deduction under Section 24? Will the income from let-out
property be added to taxable income?

Loss under house property (self-occupied) is allowed to set off against income from let-out
property. Additionally, intra head set off is also allowed for loss from let-out property,
which means loss arrived from let out property/ies can be set off against income from such
let out property/ies.

The income from house property will be added to the total taxable income.

For example:

If the income from one let-out house is INR 3,00,000 while the loss from another let-out
house property is INR 2,00,000, the earnings from house property chargeable to taxes will
be INR 1,00,000.
However, if the income from one house property is INR 1,00,000 while loss from another
house property is INR 2,00,000, the total loss of INR 1,00,000 will not be allowed to set-off
from salary earnings or any other head of income.

7. Will my contribution to Provident Fund (PF) be exempted under Section 80C?

No, your contribution to PF will not be considered for tax exemption under Section 80C in
the new regime. You cannot opt out of the Provident Fund.

8. Will the interest from NSC, savings banks, and deposits for senior citizens be considered as
other income? Will tax benefit be available under Section 80C, 80TTA, 80TTB respectively
in the new regime?

Though the income from bank interest and NSC will continue to be added to the total
income, there is no tax benefit available for them under the new regime.
Miscellaneous
1. Would contributions exceeding INR 7,50,000 made by the employer to an employee’s
account in a recognized provident fund, notified pension scheme, or approved
superannuation fund be taxable as perquisite?

Yes. As per the budget proposal, a combined cap of INR 7,50,000 per annum has been
introduced as part of the employer’s contribution to the Employee Provident Fund,
National Pension Scheme, and Approved Superannuation Fund schemes. Amounts more
than INR 7,50,000 will be taxed as perquisite for the employees.

2. Are rewards/ gifts paid to professionals exempted from tax under the new regime?

Yes. like the old regime rewards up to INR 5,000 are exempted from tax in the new
regime.

3. I have contributed towards DEGP. Will I be eligible for the benefits as per Section 80G in
the new regime? Can I opt out of my pledge?

No, benefits under the Section 80G for any donation/ charity are not available under the
new regime. Once pledged, one cannot modify their contribution.