New Delhi: When it comes to filing your income tax return (ITR), choosing between the old and new tax regimes can be a bit confusing. For individual taxpayers filing ITR-1 or ITR-2, the good news is that you can easily switch between the two regimes each year based on what works best for you.
However, if you’re someone with business or professional income and are filing ITR-3 or ITR-4, you have a one-time opportunity to make the switch. To do so, you’ll need to submit Form 10-IEA, and once you make your choice, it will be locked in for the future. So, it’s important to carefully consider your options before making the switch! ()
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If you have business income, Form 10-IEA is key to switching between the old and new tax regimes. This form is required for individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), and Artificial Judicial Persons (AJPs) with business or professional income, allowing them to choose the old tax regime.
To switch from the new tax regime to the old one or to re-enter the new regime, you must submit Form 10-IEA within the deadline specified under section 139(1). Missing this deadline means you won’t be able to make the change for that year, so it’s crucial to file on time. ()
– Log in to the Income Tax portal with your PAN and password.
– Go to e-file > Income Tax Forms > File Income Tax Forms.
– Search for Form 10-IEA, select your assessment year, and begin the filing process after reviewing the required documents.
– If you have business or professional income, select the relevant due date and continue.
– Confirm your choice to switch from the new tax regime to the old one when prompted.
– The form will auto-fill your basic details (name, PAN) from your previous filing.
– For first-time opt-outs, the form will show “opt-out” by default; for repeat filings, it will pre-select “re-entry.”
– If applicable, enter IFSC unit details; this section will remain inactive for opt-outs.
– Review the verification and declaration, agree to the terms, and preview all entries.
– Verify the form using Aadhaar OTP, DSC, or EVC.
– After verification, submit the form. You’ll receive an acknowledgement with a transaction ID and an acknowledgement number.
Taxpayers filing ITR-3 or ITR-4 can only make one switch in their lifetime—from the old tax regime to the new one. Once they choose to enter the new tax regime, they cannot switch back to the old tax regime. So, it’s important to think carefully before making the change!
When filing ITR-1 or ITR-2, you’ll be asked whether you want to opt out of the new tax regime under section 115BAC(6). The default option is “No”, meaning your tax will be calculated under the new tax regime. If you select “Yes”, your tax will be calculated under the old tax regime instead. So, it’s all about making a simple choice based on which regime works best for you!
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