Tax Regime Selection
At the beginning of each financial year, once the previous financial year is closed by the Payroll Administrator, employees will be prompted to select their preferred Tax Regime in the My Dashboard.
The option to choose between the Old Regime and the New Regime will be displayed until the employee makes a selection.
Once the regime has been chosen, the prompt will disappear from the dashboard.
Employees still have the flexibility to change their selected regime until the payslip for April is generated.
Navigate to Tax and Statutory Compliance → Tax Declaration → Income Under Section 24. Click Choose Regime and select the desired option(Old Regime or New Regime)
Employees can review both regimes before making a selection to understand which option offers them maximum tax savings.
Stop the Notification - Once you stop notification, you will not be notified further in the Dashboard and default Tax Regime at organization level will be chosen automatically for the employee.
Once selected, the payroll system will calculate monthly TDS based on the chosen regime.After the April payroll run is completed and the payslip is generated, no further changes in the tax regime will be allowed for that financial year as per the Government norms.
If an employee does not choose a tax regime and no regime was selected in the previous financial year, the default tax regime will be applied. However, if a regime was chosen in the previous financial year but not updated for the current year, the same regime from the previous year will continue for that employee.
Old Tax Regime
Employees can avail exemptions and deductions under various sections of the Income Tax Act.
Key exemptions include House Rent Allowance (HRA), Leave Travel Allowance (LTA), and deductions under sections such as 80C, 80D, and 80E.
Investment proofs and declarations are required to claim these benefits.
Tax liability is calculated after considering all applicable exemptions and deductions.
New Tax Regime
Introduced as a simplified tax system with lower slab rates.
Most exemptions and deductions (like HRA, LTA, 80C) are not applicable.
Employees have the flexibility to choose the new regime if it results in a lower tax outflow.
No need to submit investment proofs for exemptions since deductions are mostly removed.
Fig: My Dashboard - Tax Regime Selection
Fig: Choose Tax Regime
Fig: Stop Notification
Fig: Compare Regime Selection
Default Tax Regime Setting
To change the default tax regime, go to Settings → Tax and Statutory Compliances.
Click the Edit button, select the required regime, and then click Save.”
Fig: Default Tax Regime Settings
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