In Budget 2020, taxpayers were given an option to choose between the old and new tax regime. Under the new tax regime in Form 10IE taxpayers have an option to pay lesser tax on the total income. That means taxpayers will not be allowed to claim the deductions and tax benefits in Form 10IE Income Tax otherwise available in the old tax regime if the new tax regime is selected. The taxpayer has to make his/her choice before filing the Income Tax Return (ITR) of the relevant Financial Year (FY).
The option to select the new tax regime is only available for Individuals and Hindu Undivided Family (HUF).
As mentioned above, taxpayers have to make their selection in 10IE Form before filing the relevant ITR. This selection needs to be communicated to the Income Tax Department before the ITR is filed. Let’s have a look at what is form 10IE
How to inform the IT Department which tax regime is selected?
The Central Board of Direct Taxes (CBDT) has released Form 10IE of Income Tax to answer this question. In other words, any person who wishes 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 income tax. In case a taxpayer wants to opt-out of the new tax regime, the same form (10IE) needs to be submitted before filing the income tax returns for the relevant Financial Year (FY).
Form 10IE format
The basic details required to be entered in form 10IE are;
- Name of the individual/HUF
- Confirmation - Whether the individual/ HUF has any income under the head profit or gains from business or profession
- Permanent Account Number (PAN)
- Date of Birth/Incorporation (in dd/mm/YYYY format)
- Nature of Business/Profession
- Confirmation - Whether the 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)
- Details of the previous form 10IE filed (If applicable)
How to fill form 10-IE
- Once the taxpayer exercises his option to pay tax as per the new tax regime, in the previous year, this option cannot be withdrawn for the same previous year. This can subsequently be withdrawn only once for any other previous year when the taxpayer is ineligible for exercising the option.
- This form shall be signed by the individual/Karta of the HUF/Authorised Representative only.
- Form No. 10-IE has to be furnished electronically either with a digital signature or through Electronic Verification Code (EVC).
- The deciding authority in the case of form 10IE of income tax act - The Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems).
- This form will be applicable from FY 2020-21.
- In case this form is not filed by the taxpayer, Income Tax will be calculated as per the old tax rates.
- Download the form here. site:www.mastersindia.co
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