The Finance Minister, Nirmala Sitharaman had presented the Budget 2020 on the 1st of February 2020. The introduction of the new tax regime took place in the previous budget. This regime is available only to individuals and HUF where they need to opt by using Form 10-IE.
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 has to make his/her choice before filing the Income Tax Return (ITR) of the relevant Financial Year (FY). Tax Payer also need to communicate the selection to the Income Tax Department before filing the ITR.
The Central Board of Direct Taxes (CBDT) has released Form 10-IE. 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 taxpayer 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).
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 can submit form before/at the time of ITR filing.
Given below are the basic details that we need to enter in form 10IE:
The notification has given the clarification that tax payer need 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. However, the income tax department is yet to specify the procedure of filling and verifying the form.
If an individual who has opted for old tax regime with his/her employer for TDS on salary, plans to opt new tax regime at the time of filing ITR, then he/she can do that by filling the new form i.e. 10-IE.”
If an individual forgets to fill the new form i.e. Form 10-IE, at the time of filing ITR, then he/she may be disallowed the tax rates available under the new tax regime. The tax department will calculate his/her income tax liability based on the existing/old tax regime.
This form shall be signed by the individual/Karta of the HUF/Authorized Representative only.