Form 10IE is an important document to be filled in and submitted during filing returns by all taxpayers who have decided to opt for the new tax regime of the ITA. The new tax regime offers reduced tax rates and taxpayers (individuals or HUFs) have to submit 10IE in order to inform the IT department of their decision. In this article, we’ll take a look at what is form 10E, what’s the new tax regime, the process to submit the form and the steps to file it online.
What is form 10IE?
Form 10IE is a written declaration that as a taxpayer you wish to opt to be taxed under the new tax regime, under Section 115BAC of the Income Tax Act. The new tax regime offers lower tax rates. However, it also mandates taxpayers to let go of most of the tax exemptions and deductions that are available under the old tax regime. If you wish to switch from the old tax regime to the new one, then Form 10IE is mandatory. If you fail to submit this form, then automatically, you’ll be assessed with the old tax regime.
What is the new tax regime?
The new tax regime was introduced in the 2020-21 Union budget. It offers an alternative to the existing (old) tax regime. Under the new tax regime, taxpayers are offered lower tax rates. However, they also have to forgo many tax exemptions and deductions that are applicable in the old tax regime. Examples of some of these deductions would be Sections 80C, 80D, and 24 (b). This new tax regime is aimed at simplifying the tax compliance process for taxpayers. It aims to reduce the tax burden on individual taxpayers who do not usually avail of various tax exemptions. Once the new tax regime is availed, then the taxpayer is subject to some restrictions.
When to submit form 10IE?
Before filing your Income Tax Return (ITR) for a financial year, you must submit Form 10IE. This informs the Income Tax department whether you wish to continue with the old tax regime or switch to the new one. If you are a professional or a business owner, you can submit Form 10IE each year before filing your IT returns. However, once you choose the new tax regime, it will automatically apply to all future years unless you meet specific conditions that allow you to revert to the old regime.
Time limit for filing form 10IE
You must file form 10IE on time so that certain complications are avoided in your tax assessment. Here are some tips:
- For salaried individuals without business income: You have to file form 10IE before your due date for filing returns in a particular financial year.
- For individuals with business or professional income: You have to submit duly filled form 10IE before the due date for filing your tax returns which is usually 31st October of the assessment year.
How to file form 10IE?
Filing form 10IE is fairly simple and straightforward:
1. Login to the ITR portal:
- Open the IT department’s e-filing website.
- Log in using your PAN and CAPTCHA.
2. Navigate to the ‘e-file’ section:
- Now, click on the e-file menu.
- Under the ‘Income tax return’ section, select ‘Income tax forms’.
3. Select form 10IE:
- From the drop-down list of forms, choose ‘for 10IE’.
- Select the financial year for which you are opting for the new tax regime.
4. Fill in the details:
- Fill in your details like name, PAN, and address.
- Choose whether you have professional income or business.
- Fill in your income details and any exemptions or deductions claimed
5. Confirm and submit:
- Read through all the information filled in to check if they are accurate.
- Click the ‘submit’ tab.
6. Acknowledgment receipt:
- Download and save the acknowledgement receipt for your records.
Contents of form 10IE
The following key details are required to be filled in Form 10IE:
Name of the individual or Hindu Undivided Family (HUF)
Confirmation on whether the individual/HUF has income under “profits or gains from business or profession”
Permanent Account Number (PAN)
Residential address
Date of birth or incorporation (in dd/mm/yyyy format)
Nature of business or profession
Confirmation if the taxpayer has any unit in the International Financial Services Centre (IFSC) as per Section 80LA(1A), along with related details (if applicable)
Information on any previously filed Form 10IE (if applicable)
Declaration by the taxpayer
How to switch between the new and old tax regime?
Scenario 1: Individuals having ‘Income from Business or Profession’
- In this case, the rule is that once you have opted for the new tax regime, you have to continue with that for subsequent years as well.
- You are allowed to switch back to the old regime only if you have no business or professional income. This switch is allowed only once.
Scenario 2: Individuals having income ‘other than business or profession’
- By submitting form 10IE before filing your ITR, you can switch between old and new tax regimes every year.
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How to download form 10IE copy?
Once you have successfully submitted form 10IE, you can download and save it for your records:
1. Login to the Income Tax portal: Log in using your PAN and password.
2. Go to the ‘view filed forms’ Section: Head to the section, ‘e-file’. Choose ‘Income tax forms’ and ‘view filed forms’.
3. Download the form: Choose Form 10IE for the assessment year and click on download.
Benefits & drawbacks of filing Form 10IE
Benefits:
Enables taxpayers to opt for the new tax regime with lower slab rates under Section 115BAC.
Allows flexibility to switch between old and new tax regimes (subject to conditions).
Reduces overall tax liability for individuals with fewer exemptions or deductions.
Simplifies tax computation by eliminating the need to track multiple exemptions.
Can be filed online via the income tax e-filing portal, making the process convenient.
Drawbacks:
Opting for the new regime means forgoing popular deductions like HRA, LTA, and 80C benefits.
Once chosen, switching back to the old regime in subsequent years may have restrictions, especially for those with business income.
May not be beneficial for taxpayers with significant investments in tax-saving instruments.
Common mistakes to avoid when filing Form 10IE
Entering incorrect PAN or personal details.
Forgetting to file Form 10IE before the due date for filing the ITR.
Opting for the new regime without comparing tax liability under both regimes.
Not providing accurate business/profession details, if applicable.
Overlooking the requirement to file the form again when switching regimes in future years.
Conclusion
Under Section 115BAC, form 10IE plays an important role, especially when opting for the new tax regime over the old one. It allows you to choose the new tax regime thereby gaining lower tax rates after informing the IT department. Whether you earn by way of salary or run a business, it is important to understand how and when to file form 10IE so that you can simplify your ITR process.
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