How to file Form 10-IE for opting New Tax Regime

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How to file Form 10-IE for opting New Tax Regime

The new regime of taxation as was announced by Finance Act 2020 is contained in section 115BAC which is forming the part of Chapter XII of the Income Tax Act-1961. Section 115BAC is applicable to Individual & HUF Only.
For opting the New Tax Regime, filing of Form NO. 10IE is mandatory if the taxpayers have income from Business and profession, However, for taxpayers who don’t have income from Business and profession, filing of Form No. 10IE is not required. Central Board of Direct Taxes (CBDT) has released Form 10-IE on the portal and it has to be e-filed only.
Any person who wish to pay income tax as per the new tax regime has to communicate his/her choice to the Income Tax Department through form 10-IE. In case a taxpayers who don’t wants to opt-out of the new tax regime, the same form 10-IE needs to be submitted before filing the income tax returns for the relevant Financial Year (FY). Under the new tax regime, taxpayers can pay lesser tax on the total income with reduced tax rates. Also, taxpayers cannot claim the deductions and tax benefits otherwise available in the old tax regime. The taxpayer is required to make the choice before filing the Income Tax Return (ITR) of the relevant Financial Year (FY). Tax Payer also needs to communicate the selection to the Income Tax Department before filing the ITR in case such taxpayers have income form business and profession.

 

Switching between Old Tax Regime & New Tax Regime
  1. Taxpayers with Business Income
  • Individuals having business income are required to choose between the new and old tax regime.
  • Once such taxpayers have opted for the new tax regime, they only have a one-time option of switching back to the old tax regime in their lifetime. If taxpayers with Income from business & Profession then such taxpayers with will have to fill Form 10-IE twice – once to use the new tax regime and the second time to switch back to the old regime. The option to use form No. 10IE it for the third time to switch back to the new tax regime may not be there. In short, Form 10IE can be used on maximum  of 2 occasions.
  •  Once they switch back, they cannot opt for new tax regime again.
  1. Taxpayers without Business Income

    An individual having salaried income and no business income has the option to choose between the old and new tax regimes every year.

  • Such taxpayers have free entry and fee exit option every year.
  • Such taxpayers do not have to file the Form 10IE. Instead they can just select the option under 115BAC while filing the ITR 1 or 2.
As per the income tax laws, an individual having business income shall submit this form before the due date of filing ITR i.e. July 31 (unless extended by the government). For salaried individuals, they are not required to submit form No. 10IE and they can just click file the ITR by clicking the column in the ITR.
 
Procedure to File Form No. 10IE?
For filing the Form No. 10IE to opt for new tax regime, there are the few basic details which is required to be entered at the portal. The information requires are as under:
  1. Name of the individual/HUF
  2. Confirmation – Whether the individual/HUF has any income under the head profit or gains from business or profession
  3. PAN
  4. Address
  5. Date of Birth/Incorporation (in dd/mm/YYYY format)
  6. Nature of Business/Profession
  7. Confirmation – If taxpayer has any unit in International Financial Services Centre (IFSC), as referred to in sub-section (1A) of section 80LA. (if yes, the details have to be provided)
  8. Details of the previous form 10-IE filed (If applicable)
  9. Declaration
 
Tax payer needs to file the form electronically. Taxpayers can file the form on the IT Portal to opt for the new tax regime for FY 2020-21 onwards. The form will be filed using either digital signature certificate or electronic verification code.
Here is a step wise guide to file Form No 10IE
  1. Log in to the income tax portal at www.incometax.gov.in
Login to the portal using valid credentials
  1. Navigate the menu e-File > Income
Tax Forms > File Income Tax Forms
  1. Form 10IE option
Taxpayers can access the form 10IE option under the Persons with Business / Profession – Income tab.
  1. Complete the Form 10IE Process
Click on the option to File Now. On the next screen, select the relevant assessment year and click on continue.
Provide the details for the 4 sections mentioned on the application page.
  1. Assessing Officer
The information on this page will be prefilled. Verify the details in case of any error and click on confirm.
  1. Basic Information
Personal details such as name, PAN, date of birth and address are prefilled from the profile page. Verify such details. Select the appropriate option under the nature of business or profession tab (if any) and save these changes.
  1. Additional Information
There are additional information which is to be submitted.
Select yes if the taxpayer has any unit in the IFSC. If yes, you will view a drop-down where you will have to enter additional details such as: name of unit, address of unit and nature of business or activities. Once done, save these details.
  1. Verification Stage
The final step of filing the Form 10IE is the verification stage. Review the information presented on this screen and click on the option to save this information.
  1. Preview
Finally, preview all of these details and proceed to e-verify these details to complete the filing o this form. You can also download this preview page for your reference.
  1. e-Verify Form 10IE
Select from any of the options provided to e verify the form 10IE to complete the process. On completion, you will receive the acknowledgement number which you shall require while filing your ITR.
 
FAQ on ITR Filing for AY 2021-22
  1. It may be noted that employees can choose a new tax regime at the time of filing ITR even if they have opted for the old tax regime with the employer
  2. Dividend income is now taxable in the hands of the shareholder; and is also subject to TDS at 10% in excess of INR 5000 u/s 194 & 194K. Foreign Dividend is taxable at slab rates. TDS is not applicable to such dividends. The taxpayer should report such income under the head IFOS in the ITR filed on the Income Tax Website. Taxpayers have to report a quarterly breakdown of Dividend Income under IFOS as the advance tax liability and interest thereon could be calculated by this quarterly figure by the income tax department. TDS from dividend is required to be done only if the amount exceeds Rs. 5000/- . The amount of TDS deducted shall reflect in your Form 26AS only and it will also reflect the name of the deductor.
  3. Section 194K – TDS on Dividend from Mutual Funds:
    In Budget 2020, DDT is abolished and thus dividend income is taxable. TDS under section 194K has to be deducted on payment of dividend from Mutual Funds.

1 Comment

  1. September 17, 2021
    Ashok Kumar Aggarwal

    good informative

    Reply

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