New Form 10-IEA Introduced by CBDT for Business Owners and Professionals Opting for the Old Tax Regime
As per the CBDT release, individuals with business or professional income who wish to opt out of the new tax regime must submit Form 10-IEA before the due date mentioned in Section 139(1) of the Income-tax Act, 1961, for filing their income tax return for the respective assessment year.
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New Form 10-IEA Introduced by CBDT for Business Owners and Professionals Opting for the Old Tax Regime
The Central Board of Direct Taxes (CBDT) has introduced procedural changes that benefit business owners and professionals, giving them the option to stick to the old tax regime starting from the financial year 2023-24.
This decision is significant because the new tax regime is now the default option, making it crucial for individuals earning business income to familiarize themselves with the revised procedures.
According to a release by the CBDT, individuals who wish to select the old tax regime for the current financial year will need to complete Form 10-IEA. This form allows business owners and professionals to opt for the previous tax regime and utilize relevant tax exemptions and deductions that apply to them.
As per the CBDT release, individuals with business or professional income who wish to opt out of the new tax regime must submit Form 10-IEA before the due date mentioned in Section 139(1) of the Income-tax Act, 1961, for filing their income tax return for the respective assessment year.
Individuals are required to provide important information such as their name, Permanent Account Number (PAN), assessment year, and status when filling out Form No. 10-IEA. The form also includes a section where individuals can indicate whether they are opting out of the default new tax regime or re-entering it, along with the relevant dates of opting out and exercising the option.
It is worth noting that until FY22-23, individuals had to submit Form 10IE to opt for the new tax regime.
The previously used form, Form 10IE, has been discontinued as the new tax regime is now the default option starting from FY 2023-24. Business owners and professionals who want to continue with the old tax regime will need to explicitly opt for it. They will have a one-time opportunity to switch to the new tax regime, but once they make the switch, they cannot revert back to the old regime. Individuals must verify Form No. 10-IEA while submitting either a digital signature or an electronic verification code.
According to Mayank Mohanka, a partner at S M Mohanka & Associates and the founder of TaxAaram.com, starting from FY 2023-24 (AY 2024-25), the new personal tax regime under section 115BAC(1A) has become the default option.
He further adds “Taxpayers who do not have any business or profession can choose the old regime by simply selecting the old regime checkbox in their Income Tax Return (ITR) forms when filing their returns. However, taxpayers who have business or profession can opt for the old regime by submitting an electronic declaration in the prescribed form under section 115BAC(6) before filing their ITRs.
Taxpayers with business or professional income who opted out of the new tax regime can opt back in only once by filing Form 10-IEA. However, individuals without business or professional income can exercise this option every year. The CBDT introduced Rule 21AGA and Form 10-IEA through notification No 43/2023 dated 21.6.2023 to facilitate this process. Taxpayers in business or profession can withdraw from the old regime once by submitting Form 10-IEA again.
Taxpayers with business or professional income who opted out of the new tax regime can opt back in only once by filing Form 10-IEA. However, individuals without business or professional income can exercise this option every year. The CBDT introduced Rule 21AGA and Form 10-IEA through notification No 43/2023 dated 21.6.2023 to facilitate this process. Taxpayers in business or profession can withdraw from the old regime once by submitting Form 10-IEA again.
Also Read: Common GST Audits norms For Centers & States From This Financial Year
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