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Form 10IE: How to Choose New Tax Regime?

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Created on
May 8, 2023

Summary

What’s Inside

Finance Minister Nirmala Sitharaman introduced a new tax regime in the Union budget 2020 that offers lower tax rates for individuals who forego most of their exemptions and deductions. This new regime received mixed reactions from taxpayers. In case you are looking to change your tax regime, you need to file the Form 10IE.

In this blog, we explore the components, timelines and application process for Form 10IE.

What is the Old Tax Regime?

The Old Tax Regime pertains to the method of calculating income tax based on the traditional income tax brackets. Under this regime, taxpayers have the option to utilize approximately 70 exemptions and deductions offered by the Income Tax Act (such as deductions under Section 80C and 80D), along with other tax advantages like HRA (House Rent Allowance), LTA (Leave Travel Allowance), and more.

What is the New Tax Regime?

The New Tax Regime offers lower tax rates but fewer exemptions and deductions compared to the existing or old tax regime. This change was introduced as part of the government's initiative to simplify the tax system and make it more user-friendly for taxpayers.

Old Tax Regime VS New Tax Regime

Income Slab

Old Tax Regime

New tax Regime 

(until 31st March 2023)

New Tax Regime 

(From 1st April 2023)

₹0 - ₹2,50,000

-

-

-

₹2,50,000 - ₹3,00,000

5%

5%

-

₹3,00,000 - ₹5,00,000

5%

5%

5%

₹5,00,000 - ₹6,00,000

20%

10%

5%

₹6,00,000 - ₹7,50,000

20%

10%

10%

₹7,50,000 - ₹9,00,000

20%

15%

10%

₹9,00,000 - ₹10,00,000

20%

15%

15%

₹10,00,000 - ₹12,00,000

30%

20%

15%

₹12,00,000 - ₹12,50,000

30%

20%

20%

₹12,50,000 - ₹15,00,000

30%

25%

20%

>₹15,00,000

30%

30%

30%

How to Switch Between Old Tax Regime and New Tax Regime? 

Before filing their Income Tax Returns, taxpayers are required to indicate their chosen tax regime by notifying the Income Tax Department through Form 10 IE. 

This option to select between the Old Tax Regime and New Tax Regime is applicable to individuals and Hindu Undivided Families (HUF) with income falling under the PGBP (Profit and Gains of Business or Profession) category. 

What is Form 10IE?

Form 10IE is a digital application form that taxpayers are required to complete for their decision to opt for the new tax regime to the Central Board of Direct Taxes (CBDT). 

Please be aware that once you have chosen the new tax regime for a given financial year, it must remain the same financial year. 

Time Limit for Filing Form 10IE

The time limit for filing Form 10IE is before the due date for filing the income tax return. 

What are the Components of Form 10IE?

It has to be submitted before going for income tax return as an acknowledgement number of 15-digital is provided, which is essential to proceed with the ITR filing as per the new regime.

Some basic details that you need to fill in are listed below:

  • Name of the individual/HUF
  • Pan number
  • Address
  • Date of birth/date of incorporation
  • Nature of business/profession
  • Details of the previous form 10 -IE filed (if done)
  • Confirmation if HUF or individual has any income under "Profits or gains from business and profession."
  • Confirmation if the taxpayer has any unit in IFSC – in yes or no
  • Declaration

How to Fill Form 10IE?

Online

Follow the given steps for filing for the new tax regime with Form 10IE online:

Step 1: Login to the income tax portal with your credentials. From the dashboard, click on e-file > income tax forms > file income tax forms.

Step 2: Enter Form 10IE in the search box or scroll down to select the form under the "Person with Business/Profession income" option.

Step 3: Click on the ‘File now’ option and enter the assessment year

Step 4: Next, Form 10-IE is displayed, which features four sections – Assessing officer (already filled), basic information, additional information, verification

Step 5: Under the verification section, you have to review the information and agree with the terms and conditions

  1. Once done, you will be asked to re-verify the shared details. You can re-verify with a digital signature certificate, Aadhar OTP, or electronic verification code
  2. Finally, once re-verification is completed, the acknowledgement number is shared

The taxpayer is requested to note the acknowledgement number and Transaction ID for future reference. 

Offline 

Follow the given steps for filing for the new tax regime with Form 10IE offline:

Step 1: Visit the Income Tax e-filing portal and log in.

Step 2: Select the “E-file” tab and choose “Income Tax Forms” from the dropdown menu. Then click on “View Filed Forms”.

Step 3: Choose the assessment year and the “Income Tax Return” option from the list. Select the “Submit” button.

Step 4: You can see all the forms/returns filed in the chosen assessment year. Search for Form 10IE and select the acknowledgement number.

Step 5: You will see details of the form. Select “Download” to download a form copy. You can now save the downloaded form or take a printout if you want.

Conclusion

While you decide between the old and new regimes, look at your finances with Fi Money. Know and grow your finances with our Fi Analyzer. Get insights into your monthly, weekly, and daily expenses to make sound choices in the future.

Frequently Asked Questions

1. How to fill out Form 10IE on the income tax Portal?

Taxpayers can fill out Form 10IE by visiting the income tax website and logging into the portal. Be very mindful while sharing your details, and cross-check every detail twice before submitting the application.

2. How to choose between the old tax regime and the new tax regime?

To make a choice, visit the official website of the income tax department and make use of a tax calculator to find out your taxable income under both regimes. With that knowledge, decide which is better for you.

Disclaimer

Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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