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Form 10 IE Income Tax

Form 10 IE Income Tax (Unlimited Guide)

The 2020 budget gave taxpayers the opportunity to choose between the old tax system and the new tax system. Under the new tax regime in form 10 IE income tax, taxpayers have the option to pay less tax on their gross income.

 Taxpayers will not be able to claim Form 10IE deductions and tax benefits from income tax earned under the old tax system if the new tax system is elected. The option to choose the new tax regime is only available to individuals and Hindu Undivided Families (HUFs).

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

The Central Board Direct Tax (CBDT) has issued Income Tax Form 10IE. In other words, any person wishing to pay income tax under the new tax regime must notify their chosen income tax authority in Form 10 IE Income Tax.

 If a taxpayer wishes to opt out of the new tax regime, form 10IE must be filed before filing the income tax returns for the relevant Financial Year (FY).

How can I get the 10IE Acknowledgement number?

Step-by-Step Instructions for Filing Form 10 IE of Income Tax:

  1. Visit the official income tax portal at https://www.incometax.gov.in/iec/foportal and sign in with your credentials.
  1. Go to the tab e-file and select the Income Tax Form option.
  1. Select File Income Tax Forms from the drop-down menu.
  1. A variety of forms appears. From the Form 10IE menu, select File Now.
  1. Select the Assessment Year and then click continue. 
  1. Fill in the details for the four sections listed on the application page.
  1. Personal data such as name, PAN, date of birth, and address are pre-populated on the profile page. Select the appropriate options on the Business or Occupation Type tab (if any) and save these changes.
  1. Select Yes if the taxpayer has a business entity in IFSC. In that case, a drop-down menu will appear where you need to enter additional details. for example. : Unit name, unit address, and type of business or activity. Save these details.
  1. The verification stage is the last step in the Form 10IE filing process. Review the information and click save.
  1. E-verify the form 10IE using any of the available options to finish the process. Once completed, you will receive an acknowledgment number that you will need while submitting your ITR.

What is the time limit for filing Form 10 IE?

If you have business income, you can file Form 10IE before the income tax filing due date ie. by 31st July or such other date as determined by the Government of India. Salaried employees can submit Form 10IE before or at the time of filing their income tax return.

How do I download the 10IE form?

 Download Form 10IE by visiting the official website of the Income Tax Department of India at www.incometaxindia.gov.in and clicking on the Forms section. Click the appropriate link for Form 10IE.

What happens if Form 10-IE is not filed?

If an individual forgets to fill out the new form ie. Form 10-IE, at the time of  ITR filing, an individual cannot claim the tax rates under the new tax regime. The tax department calculates the income tax liability based on the existing/old tax regime.

What are the Contents of Form 10IE?

Form 10-IE requires the following information:

  •  Individual / HUF name
  • Individual / HUF address
  • PAN of individual / HUF
  • Financial year for which option is exercised
  • If an individual/HUF has business/professional income
  • Individual / HUF birth date
  • Nature of business/profession (only if a business/profession exists)
  • Whether the option to select the new tax regime for the previous year was exercised (yes or no) and the date on which the option was exercised
  • Declaration from the Individual/ Karta of the HUF/Authorized Representative

How to Switch Between Old and New Tax Regimes?

The process of switching between the old and new tax regimes is different if you have business income and non-business income. Let’s look at both options here.

For Business Income

Individuals receiving business income have no option but to choose between the old and new tax regimes each year. If you choose the new tax system, you have only one chance to switch to the old tax regime. After you switch back, you will no longer be able to select the new regime. In other words, if you have business income, file form 10IE twice. First, while choosing the new tax regime, and second while switching back to the old tax regime.

For non-business income

Salaried individuals without business income can choose between the old tax system and the new tax regime each year. Therefore, you must file a Form 10IE each year to opt for the new tax regime.

E-filing of Form 10IE

Form 10IE can be filed electronically through the Income Tax Department’s official portal. File Form 10IE using a digital signature or electronic verification code (EVC).

Frequently Asked Questions (FAQs)

Is it mandatory to File Form 10IE every year?

Yes, if you have opted for the new tax regime and would like to earn income under the heading Profits and Profit from Business and Profession, you will need to file Form 10IE.

Can I choose between the new and old tax regimes every year?

Only salaried employees are allowed to change their tax regime annually during or before filing the ITR.

Can I withdraw Form 10 IE?

If a taxpayer has exercised the right to elect to pay tax under the new tax regime in the previous year, this right will no longer be revocable for the same previous year. 

Who needs to sign form 10-IE?

The individual/Karta of the HUF/Authorized Representative must sign form 10 IE.

Is it possible for me to opt out of the new tax regime?

You can opt out of the new tax regime if you are a salaried employee. However, you can only switch back to the new tax regime only if you have business income.

Wrapping Up

Before filing Form 10IE, make sure you understand the old and new tax regimes.

Understanding both tax systems will enable you to make an informed decision based on your financial objectives and investments. You must read all the above details carefully before submitting your return using Form 10IE. 

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