New Delhi, Aug. 24 -- The Rs.12 lakh income tax threshold under the new tax regime has brought significant relief to individual taxpayers. However, for those earning income from a business or profession, this headline figure can sometimes create a false sense of security.

Simply having an income below Rs.12 lakh does not automatically mean that no tax will be payable or that the taxpayer cannot receive a tax demand. The tax regime chosen, the nature of the income and, crucially, compliance with the prescribed procedure can all affect the final outcome.

The new tax regime is the default option. Taxpayers earning only a salary, interest or other non-business income generally have greater flexibility in choosing between the old and new reg...