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Opting the tax regime

18 May 2024

dear all,
I have a doubt regarding the tax regime selection. from fy 23-24 default regime is new regime. so a person with business income in this year, if he wants to continue filing under old regime as done in previous years, has to file form 10IEA. is this understanding correct? and also he can return back to new regime only once, after this opting out??

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20 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177852 Points)
Replied 18 May 2024

Yes, you are correct.....

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CA.Manya Hari Dudani (Chartered Accoutant) (33 Points)
Replied 18 May 2024

yes In fy 23-24 by default new regime

Manya

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Sreevidhya V (405 Points)
Replied 18 May 2024

Thank you both for your on time reply

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 18 May 2024

But, I can't understand this is why @ Mr Dhirajlal Rambhia Sir...

Bcoz, The person(s) filed ITR under old regime in FY 22-23. And He also want to continue the old regime in FY 23-24.

Then why ITD want to file another one form for changing that default option.

Why not they give previous one will continue...??

It's very bad by ITD...

Am I right...??

Also many clients asking the same 😇😇😇😇

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177852 Points)
Replied 19 May 2024

Section 115BAC of the Income Tax Act, 1961 was introduced by Finance Act, 2020 for the first time and the provisions have been significantly amended vide Finance Act, 2023 which are applicable w.e.f. Assessment Year 2024-25.

The New provisions of Section 115BAC of the Act (as applicable from AY 2024-25) provide that the New Tax Regime will be the default tax regime as announced by the Honourable Finance Minister in her Budget Speech while presenting Union Budget, 2023.

The relevant Extract of Budget Speech 2023 is as under:

“We are also making the new income tax regime as the default tax regime. However, citizens will continue to have the option to avail the benefit of the old tax regime” ....................... "now, with the introduction of Section 115BAC, the taxation has been simplified and tax rates are significantly lower as per Section 115BAC(1A), i.e., although the taxpayers shall not be eligible to claim majority of the deductions / exemptions from the total income, but the rates of tax will be lower."

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177852 Points)
Replied 19 May 2024

W.e.f. AY 2024-25, the New Regime of taxation provided under section 115BAC of the Act is THE DEFAULT TAX REGIME which is applicable to following persons:

a) Individual,

b) HUF,

c) AOP (other than a cooperative society),

d) Body of Individuals (whether incorporated or not),

e) An artificial juridical person as defined u/s. 2(31)(vii).

Partnership firms (including LLP), Companies, Cooperative Societies are not covered under Section 115BAC.

Upto AY 2023-24: Only Individual and HUF could opt for New Tax Regime u/s. 115BAC.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177852 Points)
Replied 19 May 2024

Upto AY 2023-24:

a) Optional for assessee to opt for taxation u/s. 115BAC.

b) Option to be exercised by filing Form 10-IE (in case of person having income from business or profession) within due date u/s. 139(1) of the Act.

c) Option to be selected while filing return of income u/s. 139(1) of the Act (in case of person not having income from business or profession).

d) If Option not exercised – then return of income had to be filed only under the Old Scheme.

e) Applicable only to Individual or HUF.

W.e.f. AY 2024-25:

a) New Regime (Section 115BAC) is Default Tax Regime and Old Regime is optional.

b) If a taxpayer (having income from business or profession) has to opt for Old Regime, then Form 10-IEA has to filed within the due date specified u/s. 139(1) of the Act.

c) If a taxpayer (not having income from business or profession) has to opt for Old Regime, then Option has to be selected while filing return of income u/s. 139(1) of the Act.

d) To opt out of the New Regime, the above procedure (of filing Form 10-IEA for person having income from business / profession or selection in ITR for person not having income from business / profession) is irrespective of whether such taxpayer had filed ITR for AY 2023-24 under the Old Regime or the New Regime.

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Sreevidhya V (405 Points)
Replied 19 May 2024

Sir, good explanation

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177852 Points)
Replied 19 May 2024

Thanks ...............

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 20 May 2024

Sir, Thanks for the replies.

Yes, These are done.
But, My Question/opposition is why dept raise this default option...??

Assessee will choose as per their requirement. Old is old and new requirement then they can move under new.

But, Now it's compulsory from New to Old or Same.

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 20 May 2024

Originally posted by : Dhirajlal Rambhia
	Upto AY 2023-24: a) Optional for assessee to opt for taxation u/s. 115BAC. b) Option to be exercised by filing Form 10-IE (in case of person having income from business or profession) within due date u/s. 139(1) of the Act. c) Option to be selected while filing return of income u/s. 139(1) of the Act (in case of person not having income from business or profession). d) If Option not exercised – then return of income had to be filed only under the Old Scheme. e) Applicable only to Individual or HUF. W.e.f. AY 2024-25: a) New Regime (Section 115BAC) is Default Tax Regime and Old Regime is optional. b) If a taxpayer (having income from business or profession) has to opt for Old Regime, then Form 10-IEA has to filed within the due date specified u/s. 139(1) of the Act. c) If a taxpayer (not having income from business or profession) has to opt for Old Regime, then Option has to be selected while filing return of income u/s. 139(1) of the Act. d) To opt out of the New Regime, the above procedure (of filing Form 10-IEA for person having income from business / profession or selection in ITR for person not having income from business / profession) is irrespective of whether such taxpayer had filed ITR for AY 2023-24 under the Old Regime or the New Regime.

Sir,

One question based on this...

One of the assessee file his income tax (Salary & Freelancing Income) for AY 23-24 under old regime.

Now, His filing option is default under new regime as per ITD.

What can he do if continues under old regime...???

What can he do if filing under new regime...???

Please give suitable explanation....

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177852 Points)
Replied 20 May 2024

For ITR 3/4, and opting 'Old regime' for AY 2024-25 (& continuing it afterwards), File Form 10IEA before due date of filing return (i,e, 31st July for non-audit cases); even though he may have been filing ITR under Old Regime previously.

If the form is not filed before due date or otherwise, ITR will be processed under New Regime only.

1 Like