In the Budget 2024, the central government has made changes to the tax regime, including increased slab relaxations and a rise in the standard deduction from ₹50,000 to ₹75,000. Despite these adjustments, some taxpayers prefer the old tax regime and may choose to switch to it.
Taxpayers who wish to file their income tax return under the old regime are required to opt out of the new tax regime. To do so, individuals must submit Form 10-IEA, a declaration for choosing to ‘opt out of new tax regime.
Here are the key provisions to consider:
- Submit Form 10-IEA: Taxpayers earning income from business or profession need to submit Form 10-IEA to pay income tax under the old tax regime. Specifically, individuals filing ITR-3, ITR-4, or ITR-5 with business income (other than cooperative societies) must submit this form.
- Tick the Option: Taxpayers without business or professional income must tick “opting out of new regime” in the ITR form without the requirement to file Form 10-IEA. This applies to individuals and HUFs filing returns in Forms ITR-1 or 2.
- One Chance Only: Those with business or professional income can only opt out of the new tax regime once. After doing so, they have only one opportunity to switch back to the new regime, and once they make this change, they cannot choose the old regime in the future.
- Each Year: However, individuals with non-business income can switch between the new and old tax regimes annually, but within the same year, they can select the old tax regime only before the due date of filing the return.
- Default Regime: It’s important to note that the new tax regime is the default regime for AY 2024-25. Any previous choices of regimes will not apply for AY 2024-25.
