Overview: Earlier, till FY 2022-23 when the new tax regime was not the default tax regime, individuals had to file Form 10-IE to specify their willingness to choose the new tax regime. However, starting FY 2023-24, the new tax regime has been set as the default tax regime. This means that if the taxpayer does not specify their intent to choose the old regime through filing of Form 10IEA, they will be automatically enrolled in the new tax regime.
Relevant Strings: Section 115BAC(6) of The Income Tax Act 1961, Rule 21AGA of Income Tax Rules and Notification No. 43/2023 dated June 21, 2023 by Central Board of Direct Taxes.
Applicability: Individual, HUF, AOP (other than co-operative societies), BOI & Artificial Judicial Persons (AJP) having income from business and profession.
It is not applicable to assessees Filing ITR 1 / ITR 2 i.e. person having income other than business or profession.
Frequency of Filing Form 10IEA: This form can be filed twice in lifetime i.e. one for opt out of new tax regime and one for re-entering in to the new tax regime.
Note that the above restriction does not apply to assessees filing ITR 1 / ITR 2, as they can choose to opt in or opt out of the New Tax Regime in each assessment year while filing the return.
Deadline to File the Form: Before filing of Income Tax Return (ITR) or due date of filing ITR as mentioned under Section 139(1) of The Income Tax Act 1961, whichever is earlier.
Note that in order to get the benefit of filing of Form 10IEA, it is advisable to file the form before filing of ITR. As, Acknowledgement Number and date of filing of filed Form 10IEA are required to be provided while filing the ITR.
How to file Form 10IEA: The form can be filed electronically through the income tax department’s e-filing portal and shall be e-verified using methods such as Aadhaar OTP, electronic verification code (EVC), or digital signature certificate (DSC).
Other Important Information
- Taxpayers are advised to choose this option only after thorough evaluation of their income and comparing the tax payable under both the regimes.
- Taxpayer shall maintain records of the filed form and acknowledgment for future reference and verification purposes.
- It is advisable for taxpayers to seek professional assistance before filing their ITR and choosing a tax regime, given the limitation on switching regimes.