FORM 10IE FOR NEW TAXATION REGIME IN INCOME TAX ACT (Section 115BAC)

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SHRUTI AGARWAL (Querist)
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12 December 2021 Dear Sir,
Question No. 1 - I have read about the Form 10IE on Cleartax.in that if the taxpayers forget to fill the Form 10IE before or at the time of filing of ITR, the taxpayer will be disallowed to use the benefit of the concessional tax rates of the new tax regime. The income tax department will calculate tax based on the old/existing tax regime.
Sir my question is that what does disallowed means here Is it mean that the assesse will be disallowed for all the subsequent years to fill the Form 10IE for opting the new taxation regime or does it means that only for the A.Y. 2021-22 he will be disallowed to opt for new taxation regime and tax will be calculated as per the old taxation regime?

Question No. 2 - If a assesse having business income in A.Y. 2021-22 does not opt for new taxation regime and fills the Form 10IE expressing that he withdraws from new taxation regime. Will he still have the option to file Form 10IE twice in a lifetime – once to choose the new tax regime and the second time for switching back to the old regime ? (because individuals with business income will not be eligible to choose between the two regimes every year. Once they select a new tax regime, they have only once in a lifetime option for switching back to the old regime. Once they switch back to the old regime, they won’t be able to choose a new regime anytime in future.)

Regards,
Shruti Agarwal

CMA Poornima Madhava

CMA Poornima Madhava (Expert)
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13 December 2021 A1: if no income from business or profession and if you do not file 10IE before the due date of itr, then normal (old) tax regime will be applicable for the current year. You have an option to switch between the two every year.
A2: if you have business income and if you don't want to opt for new tax regime, then no need to file 10E for the current year. If you opt for new tax regime, you can withdraw only once and switch to normal tax regime. Thereafter, normal tax regime would apply for subsequent years.

For more details on new tax regime, refer https://youtu.be/0HYh4oNVjwo