Form 10-IEA: Is a Option to Choose Old Tax Regime
- As per Budget 2023, the new tax regime was announced as the default tax regime. Those taxpayers willing to choose the old tax regime must file Form 10IEA.
- Taxpayers who want to opt for the old tax regime must file Form 10IEA before filing Income Tax return us 139(1) (i.e 31st July 20XX)
Purpose of Filing Form 10IEA
- Individuals with income sourced from profession/business must submit Form 10-IEA to change their new tax regime to the old one.By filling out Form 10-IEA, taxpayers can choose the old tax regime if they wish
Until 2022-23, Old Tax regime was default tax regime. So, the individuals had to file Form 10-IE to express their intent to select the new tax regime
Financial year 2023-24, the new tax regime was established as the default tax regime. It indicates that if the taxpayer doesn’t declare the intent behind choosing the old regime, then they will be automatically taxed under the new regime.
Why is Form 10-IE discontinued ?
Adoption of the new tax regime as the default tax regime As per Budget 2023.
The discontinuation of Form 10-IE allows the taxpayer to choose the old tax regime by filing Form 10-IEA.
Details to Fill in 10-IEA
- Taxpayers should provide their full name
- To choose the old tax regime, it is vital to mention the applicable assessment year
- Taxpayers should also mention whether they are discontinuing or re-entering the default tax(i.e New Tax) regime.
- Its necessary to confirm having income under PGBP
- Taxpayer Must confirm whether having unit in IFSC (International Financial Service Centre)- if answer is yes details of such IFSC unit
- A taxpayer also needs to mention his/her address and Personal details
Form 10IE- Option to choose New tax regime (Now its discontinued due to new tax regime is default as announced in Budget 2023)
The Budget 2020 introduced a new regime under section 115BAC
- Until FY 2022-23, the old tax regime used to be the default regime, whereas the new tax regime was the optional if taxpayer wants to opt New regime then he need to file Form 10IE.
- Budget 2023 amended the tax provisions and made the new tax regime the default tax regime from FY 2023-24 and onwards.
- By submitting this form, Taxpayer can inform the income tax department of their choice.
- Form 10IE, this form is applicable for only to those who file ITR-3 and ITR–4 need to submit Form 10IE
Taxpayers who are filing Forms ITR-1 or ITR- 2 are not required to submit. - Taxpayers who are filing Forms ITR-1 or ITR- 2 are not required to submit.
Individuals having ‘Income from Business or Profession
- Individuals with business income will not be eligible to choose between the two
regimes every year - They have only once in a lifetime option for switching back to the old regime
- Once they switch back to the old regime, they won’t be able to choose a new
regime anytime in future.
Individuals having income other that Income from Business or Profession (i.e Salary, House property, Other Source, Capital Gain)
- An individual with salaried income and no business income can switch between the
new and old tax regimes every year.
Hence, Taxpayer with business income probably will have to file Form 10IEA/10IE twice in lifetime
- Once to choose the Old tax regime and
- The second time for switching back to the New Tax regime. (New tax regime is default As per
Budget As per 2023
Non Filing of Form 10IEA (before due date of ROI).
- If Taxpayers forget to fill the Form 10IEA before or at the time of filing of ITR,
they will not be able to opt for the Old Tax regime. They cannot benefit from
the deductions under the Old tax regime and The income tax department will
calculate tax based on the New tax regime.