Form 10IE: Opt for the New Tax Regime

Important Keyword: Form 10-IE, Income Tax, Income tax forms.

Form 10IE: Opt for the New Tax Regime

The Finance Minister, Nirmala Sitharaman, presented the Budget 2020 on February 1, 2020. The new tax regime, introduced in the previous budget, is available exclusively to individuals and HUFs who opt for it using Form 10IE.

Key Features of the New Tax Regime:

• Reduced Tax Rates: Taxpayers can benefit from lower tax rates on their total income.
• No Deductions or Tax Benefits: Taxpayers cannot claim deductions and tax benefits that are available under the old tax regime.

Choosing the Tax Regime:

• Before Filing ITR: Taxpayers must decide between the old and new tax regimes before filing their Income Tax Return (ITR) for the relevant Financial Year (FY).
• Communicating the Choice: Taxpayers need to inform the Income Tax Department of their selection by submitting Form 10IE before filing their ITR.

How to inform the IT Department which tax regime is selected?

The Central Board of Direct Taxes (CBDT) has introduced Form 10IE. Taxpayers who want to use the new tax regime must let the Income Tax Department know by submitting this form.

If a taxpayer decides to switch back to the old tax regime, they also need to submit Form 10IE before filing their income tax returns for the relevant financial year.

Switching between Old Tax Regime & New Tax Regime

Business Income

Individuals with business income face specific rules regarding their choice of tax regimes:

• Limited Flexibility: Once these taxpayers opt for the new tax regime, they can only switch back to the old tax regime once in their lifetime.
• No Reverting: After switching back to the old regime, they cannot choose the new tax regime again.
• Form 10IE Submission:
  • First Submission: To opt for the new tax regime.
  • Second Submission: To revert to the old tax regime.

No Business Income

For individuals with salaried income and no business income:

• Annual Choice: They can choose between the old and new tax regimes every year.
• Simplified Process: These individuals do not need to file Form 10IE.
• ITR Filing: They can select their preferred tax regime under section 115BAC while filing ITR 1 or 2.

When to submit Form 10IE?

According to income tax laws, the submission deadlines for Form 10IE vary based on the type of income:

Business Income

• Deadline: Individuals with business income must submit Form 10IE before the due date for filing the Income Tax Return (ITR), which is July 31 (unless extended by the government).

Salaried Income

• Deadline: Salaried individuals can submit Form 10IE before or at the time of filing their ITR.

How to File Form 10IE?

1. Log in to the income tax portal
   Login to the portal using valid credentials and navigate to e-File > Income Tax Forms > File Income Tax Forms
2. Form 10IE option
   Taxpayers will be able to find the form 10IE option under the Persons with Business / Profession Income tab. 
3. File Form 10IE Process
   Click on the option to File Now. On the next screen, select the relevant assessment year and click on continue.
4. Preview Page
   Provide the details for the 4 sections mentioned on the application page.
5. Assessing Officer
   The information on this page will be prefilled. Verify the details in case of any error and click on confirm.
6. 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.
7. Additional Information
   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.
8. 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. 
9. 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.
10. 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.

Contents of Form 10IE

Basic Details Required in Form 10IE:

1. Name of the individual/HUF
2. Confirmation of Business Income
3. PAN
4. Address
5. Date of Birth/Incorporation (in dd/mm/YYYY format)
6. Nature of Business/Profession
7. Confirmation of IFSC Unit (if applicable)
8. Details of Previous Form 10IE (if applicable)
9. Declaration

E-Filing Process for Form 10IE:

The notification specifies that Form 10IE must be filed electronically. Here’s how to do it:

• Electronic Filing: Taxpayers can file the form on the IT Portal to opt for the new tax regime for FY 2020-21 onwards.
• Submission Methods:
  • Using a digital signature certificate
  • Using an electronic verification code

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Official Income Tax Return filing website: https://incometaxindia.gov.in/