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In the Finance Act 2020, the Finance Ministry introduced a 'New Tax Regime' Form 10IE is a declaration made by return filers in order to select the 'New Tax Regime' So, first and foremost, please explain what you mean by "new tax regime" A tax regime is the calculation of an individual's income tax liability after all deductions and tax benefits are taken into account.
For: Individual
Normal Tax Rate (Old Regime):
Net Income Range Rate of Income Tax
Up to Rs. 2,50,000 0%
Rs. 2,50,000 to Rs. 5,00,000 5%
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%
Tax Rate After Filing for 10IE (New Regime):
Net Income Range Rate of Income Tax
Up to 2,50,000 Nil
From 2,50,001 to 5,00,000 5%
From 5,00,001 to 7,50,000 10%
From 7,50,001 to 10,00,000 15%
From 10,00,001 to 12,50,000 20%
From 12,50,001 to 15,00,000 25%
Above 15,00,000 30%
Is it mandatory for all applicable taxpayers to file Form 10-IE?
No. This is optional.
For business, income assessments, Form 10-IE is required to file only one time if one chooses to pay tax at a concessional rate and shall be continually applied in subsequent assessment years. it can be subsequently withdrawn for the next financial year only and cannot allow opting again lifetime.
For other assesses, Form 10-IE is required to file every year if choose to pay tax at a concessional rate. But in the case of ITR-1 & ITR-2, you need not file form 10-IE separately its included in the ITR form itself
How can I file Form 10-IE?
Can file Form 10-IE only in online mode after logging into the e-Filing portal. Your form will be submitted once you complete e-Verification through DSC or OTP.
Due date:
Should be filed on or before the due date of filing the income tax return if having business income
Other Should be filed on or before filing the income tax return
Pros:
Reduced Tax Rate
Cons:
Brought forward losses cannot allow to set off from current year profits
Unabsorbed depreciation cannot allow to set off from current year profits
Certain deductions to salaried class i.e. LTC, HRA, Interest on loan for self-occupied property, professional tax, entertainment allowance, deduction under 80C to 80U, are Not allowed
When this option is to be exercised?
The correct answer to this question can only be answered after computing and comparing the tax liability under both regimes, however, it should not be advisable to opt new regime if there is brought forward losses, and unabsorbed depreciation.
27 Apr
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