From the financial year 2023-24, new tax regime will be automatically set as the default option. In case you want to continue using the old tax regime, you have to submit a form known as Form 10IE at the time of ITR filing. You have the option of switching between the two tax regimes annually. In this article, we will cover everything that you need to know about Form 10 IE.
Old tax regime was the tax system which prevailed before the new regime’s introduction. Under this regime, the income is computed based on the old income tax slabs. There is an option to enjoy benefits of around 70 deductions and exemptions such as Section 80C, Section 80D, etc under the IT Act. You also get additional tax benefits like LTA, HRA, among many others in this regime. The most popular tax deduction is Section 80C of the Income Tax Act that allows reduction of taxable income up to ₹1.5 Lakhs.
The new tax regime was brought into place in Budget 2020 wherein the income tax slabs were readjusted and taxpayers were offered new tax rates. That being said, individuals who opt for the new regime cannot claim several deductions and exemptions such as LTA, HRA, Section 80C, etc. Due to this, a lot of people did not opt for the new tax regime. In order to encourage taxpayers to choose the new tax regime, the government introduced five changes in Budget 2023 including a higher limit for tax rebate, streamlined tax slabs and higher exemption for leave encashment.
Form 10IE is an online application form that is to be filed by taxpayers to inform their choice of choosing the new tax regime to Central Board of Direct Taxes (CBDT). It is also used to submit details such as eligible allowances, exemptions and deductions. This form has to be submitted by the employee to the IT department before filing ITR. Kindly note that once you opt for the new tax regime, you cannot change it in the same financial year.
Individuals who have business income are not eligible to choose between the old tax regime and the new tax regime every year. After they choose the new tax regime, they have the option of switching back to the old tax system only once in their entire lifetime. Once they opt back into the old regime, they will not be able to choose the new tax regime in the future.
Therefore, individuals who have business income probably have to file Form 10IE only twice in their lifetime- once when they opt for the new regime and the second time for switching back to the old tax regime.
Salaried individuals who do not get business income can switch between the old tax regime and new tax regime every year. They are not required to file Form 10IE. They can just opt for the new tax regime via the income tax returns form.
The time limit for filing Form 10IE is mentioned below:
Individuals and Hindu Undivided Families who do not necessarily get their account audited
Before the due date of filing ITR for the particular assessment year (AY)
Individuals and Hindu Undivided Families who have to get their accounts audited
Before the due date of audit report filing u/s 44AB of the IT Act
Kindly note that the taxpayers have to file Form 10IE within the time limit prescribed to be able to choose the new tax regime for that assessment year.
The format of Form 10IE is as follows:
Name of the taxpayer
PAN of the taxpayer
Address of the taxpayer
Email ID of the taxpayer
Mobile number of the taxpayer
Aadhar number of the taxpayer
Tick the box that is applicable to you to indicate whether you are an individual or Hindu Undivided Family (HUFs)
Choose the relevant financial year for which you wish to opt for the new tax system
Tix the box that is applicable to you to indicate whether you have any profession income, business income or both
Mention deduction details that you claimed under Chapter VI-A of the IT Act like Section 80C, Section 80D, etc.
This form has to be verified by you or an authorised signatory.
The steps on how to fill the Form 10IE on the IT portal are given below:
Step 1: Visit the Income Tax e-filing portal and log in. Select the “e-File” tab and click on “Income Tax Forms” from the drop-down menu.
Step 2: Choose Form 10IE from the form list and then enter your PAN number
Step 3: Select the year of assessment for which you are filing the form.
Step 4: Enter details such as name, address, contact information, etc.
Step 5: Enter Karta or Authorised Representative details like name, address, contact information, etc. Fill in income details such as business income, capital gains, salary, etc.
Step 6: Declare any exemptions or deductions that you are eligible to claim under the IT Act.
Step 7: Calculate the tax liability and total taxable income.
Step 8: Choose the verification mode i.e., Electronic Verification Code (EVC) or digital signature.
Step 9: Double-check the form and click on “Preview and Submit”. If the information is correct, click on “Submit”
Follow the steps mentioned below to download a copy of Form 10IE:
Step 1: Visit the Income Tax e-filing portal and log in.
Step 2: Select the “E-file” tab and choose “Income Tax Forms” from the dropdown menu. Then click on “View Filed Forms”.
Step 3: Choose the assessment year and the “Income Tax Return” option from the list. Select the “Submit” button.
Step 4: You can see all the forms/returns filed in the chosen assessment year. Search for Form 10IE and select the acknowledgement number.
Step 5: You will see details of the form. Select “Download” to download a form copy. You can now save the downloaded form or take a printout if you want.
Make sure that you do proper research about both the old tax regime as well as the new tax regime before you file 10IE Form. You can make a decision based on your investments and financial objectives.
In case you want the old tax regime, you will not be able to do so as the new tax regime will be set as the default option from financial year 2023-24. That being said, Form 10IE applicability is from FY 2023-24 as well.
Only Karta of the HUF, individuals or authorised representatives can sign this form.
Both the new tax regime as well as the old tax regime has its own advantages and disadvantages. Therefore, it is recommended to do a comparison of both the regimes before you choose one as it differs from one taxpayer to another.
Yes, you can use the form to opt-in as well as to opt-out.
Only salaried employees can opt out of any of the two regimes every year.