Judges' ITR Frozen: Are Your Allowances Taxed Fairly?

Delhi High Court has told the Income Tax Department to stop processing judges' tax returns under the new regime while a dispute over their allowances is settled. Here's what this tax battle reveals about how allowances are treated — and what it means for your ITR.

Here's what happened: Delhi High Court directed the Income Tax Department to halt processing of ITRs filed by Supreme Court and High Court judges under the new tax regime.. The dispute centres on whether certain allowances received by constitutional judges are exempt from tax regardless of the tax regime chosen.. The case highlights a broader tension in Indian tax law — the new regime strips away most allowance exemptions that existed under the old system..

What you should do: Compare your tax liability under both old and new regimes before July 31 — use the income tax department's free online calculator at incometax.gov.in.. Check with your HR or payroll team which regime your employer defaulted you into for TDS in FY 2025-26 — many employees are unaware they were auto-enrolled in the new regime.. If you have HRA, home loan interest, or LTA claims exceeding ₹50,000 collectively, calculate whether opting back to the old regime saves you more than the lower slab benefit of the new one..

If your employer deducted TDS under the new regime but you want the old regime, you can still switch at ITR filing time — just ensure Form 10-IEA is submitted correctly before the deadline.