Form 10-IE: How to Opt for the New Tax Regime

What is the Old Tax Regime?

Old Tax Regime refers to the income calculated on the basis of the old income tax slabs. In the old tax regime, there is an option to avail benefits of around 70 exemptions and deductions under the Income Tax Act (such as deduction under Section 80C, 80D, etc.), and other tax benefits such as HRA, LTA, and many others are included.

What is the New Tax Regime?

The new tax regime has lower tax rates but fewer exemptions and deductions as compared to the existing, i.e., the old tax regime. This was introduced as a part of the government's efforts to simplify the tax system and make it more taxpayer-friendly.

Before filing the Income Tax Return, the taxpayers need to declare the selection of tax regime by sending an intimation via Form 10 IE to the IT department. This option to choose between the two:-Old Tax Regime and New Tax Regime is available for individuals and HUF having income under the head PGBP.

Old Tax Regime vs New Tax Regime

Have you also been stuck between the choice of a more beneficial tax regime?? Calculate your income tax here.

What is Form 10 IE?

Form 10 IE is an electronic application form used in India to exercise the option of taxation under the new tax regime. Individual taxpayers use this form to inform Income Tax Department about their choice to opt for the new tax regime and to furnish details such as eligible deductions, exemptions, and allowances.

Form 10 IE must be submitted by the employee to the Income Tax Department before due date of filing of Income Tax return.

It is important to note that once the option for the new tax regime is exercised by an employee, it cannot be changed during the same financial year.

What is the time limit for filing Form 10 IE?

The time limit for filing Form 10 IE is as follows:

1. For individuals and Hindu Undivided Families (HUFs) who do not have to get their accounts audited, the due date for filing Form 10 IE is on or before the due date of filing the income tax return (ITR) for the relevant assessment year (AY). For example, for AY 2023-24, the due date for filing ITR is 31st July 2023. Form 10IE should be filed before filing Income Tax Return.
2. For individuals and HUFs who are required to get their accounts audited, the due date for filing Form 10 IE is on or before the due date of filing the audit report under section 44AB of the Income Tax Act. For example, for AY 2023-24, the due date for filing the audit report is 30th September 2023.

It is important to note that a taxpayer must file Form 10 IE within the prescribed time limit to be able to opt for the new tax regime for that particular assessment year.

What is the format of Form 10 IE?

The format of Form 10 IE is as follows:

1. Part A: Personal Information of the Assessee
   • Name of the Assessee
   • PAN of the Assessee
   • Address of the Assessee
   • Email ID of the Assessee
   • Mobile Number of the Assessee
   • Aadhaar Number of the Assessee
2. Part B: Declaration
   • Tick the box to indicate whether the taxpayer is an individual or a Hindu Undivided Family (HUF)
   • Mention the relevant financial year for which the taxpayer wishes to opt for the new tax regime
   • Tick the box to indicate whether the taxpayer has any business income, profession income or both
   • Mention the details of any deductions claimed under Chapter VI-A of the Income Tax Act, such as Section 80C, 80D, etc.
3. Part C: Verification
   • The form must be verified by the taxpayer or an authorized signatory

The form must be filed electronically on the Income Tax Department's e-filing portal.

Who can switch between old and new tax regime?

individuals with business income generally have limited flexibility in switching between the old and new tax regimes. They can choose the new tax regime, but once they switch, they typically have only one opportunity to switch back to the old regime in their lifetime. After reverting to the old regime, they generally cannot choose the new tax regime again. Hence, people with business income probably will have to file Form 10IE twice in lifetime –

• once to choose the new tax regime and
• the second time for switching back to the old regime.

On the other hand, individuals with salaried income and no business income typically have the option to switch between the new and old tax regimes every year. They can assess their tax situation annually and decide which regime is more beneficial for them. Salaried individuals are not required to file Form 10IE. They can simply opt for new regime through the ITR forms.

How to fill out Form 10IE on Income Tax Portal?

Form 10IE is used to opt-in or out of the new tax regime introduced in the Union Budget 2020. If a taxpayer wishes to opt-in to the new tax regime, they must communicate the same to the income tax department by filing Form 10IE. The form must be filed before filing the income tax return (ITR) for the relevant assessment year.

Here's a step-by-step guide on how to fill out Form 10IE on the Income Tax Portal:

• Go to the Income Tax e-Filing Portal and log in using your credentials.
• Click on the "e-File" tab and select "Income Tax Forms" from the drop-down menu.
• Select Form 10IE from the list of forms.
• Enter the PAN (Permanent Account Number) of the HUF or individual for whom the form is being filed.
• Select the assessment year for which the form is being filed. For e,g, If you are filing taxes for the income earned in FY 2022-23, then select AY 2023-24.
• Enter the HUF's or individual's details, including name, address, and contact information. Form 10IE has 4 sections that will be displayed in front of you:-
  • (a) Assessing Officer
  • (b) Basic Information
  • (c) Additional Information
  • (d) Verification
• Most of the information regarding your personal details will be auto-filled.
• You have to provide the additional information like details of IFSC units (if any), also whether you had exercised the option to pay tax as per new regime in any of the previous years and now wish to withdraw the option. Provide all the information and save this information.
• Verification section will allow you to self-declare all the information provided. Verify all the details and if they are correct, save the information. Click on ‘Preview’ to review the Form 10IE.
• Once you are done with self-declaration, e-verify either through:-
  • Aadhaar OTP
  • Digital Signature Certificate (DSC)
  • Electronic Verification Code (EVC)

• If everything is correct, click the "Submit" button.
• After submitting the form, you will receive an acknowledgment number. Save this number for future reference.
• If you have chosen the EVC mode of verification, you will receive the code on your registered mobile number or email ID. Enter this code to complete the verification process.

How to download a copy of filed Form 10 IE?

To download a copy of Form 10 IE that you have filed on the Income Tax Portal, follow these steps:

1. Go to the Income Tax e-Filing Portal and log in using your credentials.
2. Click on the "E-File" tab and select "Income Tax Forms" from the drop-down menu. Then select “view Filed Forms”
3. Select the relevant assessment year and the "Income Tax Return" option from the drop-down list.
4. Click on the "Submit" button.
5. You will see a list of all the returns/forms filed for the selected assessment year. Look for Form 10 IE and click on the acknowledgment number.
6. The next screen will show the details of the form. Click on the "Download" button to download a copy of the form.
7. You can save the downloaded form for your records or take a printout if required.

You can download the form here.

You must have learned about Form 10IE, which lets you choose between the old and new tax regimes. If you’re unsure which regime to choose, Tax2win gives you the view of side-by-side comparison of the two regimes. If you need assistance with efiling of your ITR, book eCA now!