Prior to submitting your income tax return (ITR), it is necessary to submit Form 10IE if you wish to choose the new tax system. The new tax system, which was introduced in the Union Budget 2020, offers reduced tax rates. However, it does not allow for most of the deductions and tax benefits that were available in the former tax regime. The following are the main highlights:
1. Purpose of Form 10IE: Form 10IE is utilised to choose whether to participate or not in the new tax regime. To opt for the new tax regime, you are required to inform the income tax department by submitting Form 10IE.
2. Filing Deadline: Form 10IE must be submitted prior to filing your income tax return for the corresponding assessment year. Upon submission of Form 10IE, a 15-digit acknowledgement number will be created. In order to proceed with your ITR filing under the new tax regime, it is imperative that you provide the acknowledgement number.
3. Who needs to file : Individuals or Hindu Undivided Families (HUFs) that have business or professional income are required to file Form 10IE if they want to pay income tax under the new tax regime. Individuals who do not earn income from a business or profession can easily choose the new tax regime in the Income Tax Return (ITR) form without the requirement of filing Form 10IE. Form 10IE is only required to be submitted by individuals who file ITR-3 and ITR-4.
4. Deadline: Individuals and HUFs who are not required to have their accounts audited must file Form 10IE on or before the deadline for filing the income tax return (ITR) for the relevant assessment year¹².
Please note that you must make and submit your decision between the old and new tax system using Form 10IE before filing your income tax return. If you intend to choose the previous tax regime instead of the current default tax regime when filing for the fiscal year 2023-24, it is necessary to submit Form 10IEA prior to filing your Income Tax Return (ITR).
