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Time of India
a day ago
- Business
- Time of India
ITR filing FY 2024-25: How can taxpayers switch between old and new income tax regimes? Explained
The new personal tax regime has been made the default regime from the financial year 2023-24. (AI image) ITR filing FY 2024-25: When e-filing your Income Tax Regime (ITR) for AY 2025-26, the choice of the income tax regime is an important one. The new income tax regime is the default tax regime, so if you want to file your tax return under the old regime, you will have to expressly opt for it. The new personal tax regime has been made the default regime from the financial year 2023-24. So how can you make the switch from the new income tax regime to the old tax regime? We explain: ITR filing: How To Switch Between New & Old Tax Regime A salaried taxpayer can switch from one regime to another every year , so long as they file the original return of income within the due date u/s 139(1). According to Ishita Sengupta, Partner and India Leader, Vialto Partners, a taxpayer only has to select the appropriate option in the ITR Form 1 or ITR 2 by ticking 'Yes' or 'No' in response to the question: 'Do you wish to exercise the option u/s 115BAC(6) of opting out of the new tax regime?' By default, this section is pre-filled with 'No'. Also Read | Income Tax Return: What is Form 16? Top things taxpayers should check in this document before filing ITR 'Notably, if a return is filed after the due date (i.e., a belated return), the default tax regime—New Income Tax Regime—will automatically apply. However, if a revised return is filed, the taxpayer can still exercise the option to choose the regime, as long as the original return was filed within the due date,' Ishita Sengupta tells TOI. A taxpayer with business or professional income is NOT allowed to choose between the old and new tax regimes each financial year . by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Adidas Three Shorts With 60% Discount, Limited Stock Available Original Adidas Shop Now Undo If the taxpayer opts out of the new tax regime, they are permitted to switch back to it only once. Once the taxpayer reverts to the new income tax regime, they cannot opt for the old regime again in the future. To opt out of the new regime, a declaration must be submitted in Form 10-IEA before the due date for filing the original return. Ishita Sengupta explains that the ITR 4 (SUGAM) released for the FY 2024-25 (applicable for those who have business/ professional income under presumptive taxation) now seeks more comprehensive details from individual taxpayers opting out of the new income tax regime. The taxpayers are now required to disclose: Whether they have filed Form 10-IEA to opt out of new income tax regime in last year (FY 2023–24), along with the date of filing and the acknowledgement number Whether they intend to continue opting out for it the current year (FY 2024–25). If not, they must again provide Form 10-IEA details for the current year Even if Form 10-IEA was not filed or was filed late for last year (FY 2023–24), taxpayers must elect their current choice of regime and submit Form 10-IEA details accordingly The taxpayers who filed ITR-1 or ITR-2 last year must also confirm whether they wish to opt out this year and provide Form 10-IEA details, if applicable Hence, before making a final selection between the two income tax regimes, taxpayers should carry out a comparative analysis to determine which is more beneficial for them. Also Read | Income Tax Return filing AY 2025-26: Which ITR form should freelancers and gig workers use? Explained 'Individuals having significant tax savings payments/investments (approximately more than Rs 8 lakh) may still find the old income tax regime beneficial, but if they have business income, they should carefully evaluate future year scenarios before making the final switch,' Ishita Sengupta adds. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Mint
10-06-2025
- Business
- Mint
Income Tax: You can file ITR 2025 under the old tax regime for THESE reasons
Filing ITR 2025: As income tax (I-T) return filing season is back and taxpayers are ready to file their income tax return, you must choose one of the two tax regimes: old tax regime and new tax regime. Some taxpayers are confused as to which regime is better over the other. Here we give reasons for why the old tax regime is better over the new tax regime. To be able to decide which regime is better than the other, one must consider the following factors. I. Tax deductions: When you want to claim income tax (I-T) deductions which you are entitled by virtue of your investments, then you are recommended to opt for the old tax regime. On the other hand, if you have not invested in the tax-saving instruments (chapter-VIA deductions) such as under section 80C, 80D, 80DD, 80G, then you can go for the new tax regime. The only deductions permitted in the new tax regime are deductions under sections 80 CCD (2), 80CCH and 80JJAA as per the provision of Section 115BAC of the Income Tax Act. 2. HRA exemption: Another criterion that has a bearing on your choice of tax regime is HRA exemption. As a salaried employee when you are entitled to claim a large sum of HRA exemption, you should opt for the old tax regime. The income tax portal clearly mentions that under the old tax regime, House Rent Allowance (HRA) is exempted under section 10(13A) for salaried individuals, but this exemption is not available in the new tax regime. 3. Deduction of interest on borrowed capital: Another factor which casts a shadow on the choice of tax regime is the deduction of interest on borrowed capital. Interest on borrowed capital for Self-occupied property is not permitted as a deduction from Income from House property. Therefore, if you want to claim deduction of interest on borrowed capital for SOP, then you must opt for Old Tax Regime by selecting 'Yes' in ITR 1 / ITR 2 or 'Yes, within due date' option in ITR 3 / ITR 4 / ITR 5 in the field provided for 'opting out option' in the ITR Form. To be able to file income tax under the old tax regime, you must opt out of the default regime. It is required for the taxpayers to submit Form 10-IEA to opt out of the default regime. Only those taxpayers who file ITR-3, ITR-4 or ITR-5 have to submit Form 10-IEA if they have business income. Individuals who file their tax returns in Forms ITR-1 or ITR-2 are not supposed to submit Form 10-IEA. For all personal finance updates, visit here
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Business Standard
30-05-2025
- Business
- Business Standard
Can you switch tax regimes? rules for salaried and business taxpayers
As Indians file their taxes, many of them are likely wondering if they should adopt the old or new regime. The first offers exemptions and deductions and the other lower tax rates but no deductions: either of them will shape your take-home income. Can you switch between the two regimes? If yes, how often? Experts say that while salaried individuals have flexibility, those with business income face tighter controls. Here's a breakdown of what the rules allow, and the pitfalls to avoid. Salaried individuals can switch regimes every year Salaried taxpayers can toggle between the old and new regimes every financial year while filing their Income Tax returns (ITR). This means you don't have to commit to one regime forever. 'A salaried individual has the flexibility to switch between the old and new tax regimes every financial year,' said Amit Bansal, partner at Singhania & Co., a legal consultancy firm. 'They can reassess their financial situation and choose a regime that offers better tax benefits.' Even if you declared a particular regime to your employer for the purpose of tax deducted at source (TDS), the choice isn't binding. 'The intimation to the employer is only for TDS purposes,' said S R Patnaik, partner (head - taxation) at Cyril Amarchand Mangaldas. 'The final regime selection must be made by the individual while filing their ITR.' Restrictions on professionals, business income If you have income from business or profession, you can switch from the new regime to the old regime only once. After that, unless your business income ceases, you cannot go back to the new regime. Income earned by professionals such as Doctors, Lawyers, Accountants, etc. is termed professional income. 'Once individuals with business or professional income opt for the new tax regime, they can return to the old regime only once,' said Bansal. 'This is to ensure consistency in tax planning and avoid regime-hopping.' To exercise this switch, the taxpayer must file Form 10-IEA before the due date of filing their ITR. Missing this deadline means being locked with the default regime. Can you change tax regime while filing ITR? Experts say salaried individuals can change regimes at the time of filing their return, even if they picked another one for employer TDS purposes. But this has practical challenges. 'If a salaried person opts for the old regime at the time of filing but hasn't submitted deduction proofs to the employer, the mismatch can trigger a notice,' said Aarti Raote, partner at Deloitte India, a professional services firm. 'Form 16 would reflect a different regime, leading to delays in assessment.' Common mistakes to watch out for Experts flagged a few frequent errors: Not comparing both regimes carefully using reliable tax calculators. Assuming the employer's regime choice is final, it's not. Failing to maintain deduction proofs when switching back to the old regime. Missing deadlines for submitting forms like 10-IEA (for business professionals). 'The most important thing is that taxpayers must choose their regime before the due date for filing the ITR,' said Patnaik. 'One frequent mistake is not estimating income and deductions accurately before choosing a regime,' said Raote Bottom line According to rules, salaried individuals can switch regimes annually, while business professionals can do so only once, and with conditions. Making the right choice requires a proper evaluation of income, deductions, and future plans like home or education loans. The tax regime you choose isn't just a checkbox, it's a financial strategy. Choose wisely, file on time, and when in doubt, consult a professional.
India.com
27-05-2025
- Business
- India.com
Good news for taxpayers as Income Tax Dept extends date for filing ITRs from July 31 to...
ITR deadline The Income Tax Department on Tuesday extended the due date to file income tax returns for FY 2024-25 (AY 2025-26) from July 31 to September 15. The Central Board of Direct Taxes (CBDT) has decided to extend the due date for filing returns 'in view of the extensive changes introduced in the notified ITRs and considering the time required for system readiness and rollout of Income Tax Return (ITR) utilities for Assessment Year (AY) 2025-26', according to an official statement. This extension is expected to mitigate the concerns raised by stakeholders and provide adequate time for compliance, thereby ensuring the integrity and accuracy of the return filing process, the statement said. The notified ITRs for AY 2025-26 have undergone structural and content revisions aimed at simplifying compliance, enhancing transparency, and enabling accurate reporting. These changes have necessitated additional time for system development, integration, and testing of the corresponding utilities. Furthermore, credits arising from TDS statements, due for filing by May 31, are expected to begin reflecting in early June, limiting the effective window for return filing in the absence of such extension, the statement said. Accordingly, to facilitate a smooth and convenient filing experience for taxpayers, it has been decided that the due date for filing of ITRs, originally due on July 31, is extended to September 15. A formal notification to this effect is being issued separately, the statement added. The CBDT has notified the income tax return forms ITR-1 and ITR-4 for the financial year 2024-25 and the assessment year 2025-26 on April 30. The returns for incomes earned during the financial year from April 1, 2024, to March 31, 2025, have to be filed using the new forms. A major change in the ITR forms this year is that ITR-1 (SAHAJ) can be filed for notifying long-term capital gains (LTCG) under section 112A. This is subject to the condition that the LTCG is not more than Rs 1.25 lakh, and the income tax assessee has no loss to carry forward or set off under the capital gains head. Earlier, ITR 1 did not have a provision to report capital gains tax. This year, taxpayers, who have long-term capital gains from the sale of listed equity shares and equity-oriented mutual funds, can use ITR-1 to file their tax returns. However, ITR-1 forms cannot be filed in cases of taxpayers who have capital gains from the sale of house property or short-term capital gains from listed equity and equity mutual funds. The notification also stipulates that in cases where income tax assesses have opted out of the new income tax regime in AY 2024–25, they must declare and opt to either continue or reverse the selection. Those who have opted out of the new income tax regime for the first time in AY 2025–26 must furnish Form 10-IEA acknowledgement details. Additionally, there must also be a clarification for the late filing of Form 10-IEA.
India Today
12-05-2025
- Business
- India Today
ITR Filing 2025: Opting for old tax regime? Here's why Form 10-IEA is a must
It's that time of the year again when taxpayers gear up to file their income tax returns. For the financial year 2024–25 (assessment year 2025–26), the Income Tax Department has already released ITR-1, ITR-3, ITR-4, and ITR-5 forms. Now, if you're planning to go with the old tax regime instead of the default new regime, there's an important step you must not miss, i.e., filing Form form is a must for certain taxpayers who wish to switch back to the old regime. Let us know more about this IS FORM 10-IEA?Form 10-IEA is a declaration form for those who do not want to follow the new tax regime. If you earn income from a business or profession, and you wish to continue with the old tax regime (which allows various deductions and exemptions), this form is essential. Individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), or Artificial Juridical Persons with such income must submit Form 10-IEA before the due date for filing their the other hand, salaried individuals or pensioners without business or professional income don't need to file this form. They can opt for the old tax regime by simply selecting the appropriate option in their ITR MUST FILE IT?advertisementTo file Form 10-IEA, taxpayers need to have business or professional income and must use ITR-3 or can simply choose the "Opting out of new regime" option while filing their ITR. The form must be submitted within the deadline set by Section 139(1).Skipping this step could mean being taxed under the new regime, even if you wanted to claim benefits allowed under the old TO FILL FORM 10-IEATo complete Form 10-IEA, you'll need to enter some essential information. This includes your full name as per PAN, and the correct assessment year (such as AY 2025–26 for income earned in FY 2024–25).It's important to state whether you're discontinuing or returning to the default tax regime, as it determines how your income will be taxed, including what exemptions and deductions you can claim. If you are switching regimes, you must also mention the date from which the new regime with business or professional income need to confirm that their earnings fall under "Profits and Gains of Business or Profession."A simple yes/no confirmation is needed for owning any units in an International Financial Service Centre (IFSC), and if the answer is yes, further details must be given. Other important information includes the taxpayer's address, date of birth, PAN, type of business or profession, any earlier Form 10-IE filed, and a declaration to complete the process.
