Ready to manage your taxes? The option to choose the new tax regime offers a fresh opportunity for taxpayers to streamline their financial responsibilities. Finance Minister Nirmala Sitharaman unveiled the Budget 2020 on February 1st, 2020, marking the inception of the new tax regime introduced in the previous budget. This revamped system is exclusively available to individuals and Hindu Undivided Families (HUF), requiring them to opt for using Form 10IE. Under this fresh tax outline, taxpayers stand to benefit from reduced tax rates, resulting in lower tax liabilities on their total income.
However, it's important to note that certain deductions and tax benefits available under the old tax regime are not applicable here. To avail of this new system, taxpayers must make their choice prior to filing their Income Tax Return (ITR) for the relevant FY and communicate their selection to the Income Tax Department. Let’s dive into what this new tax regime entails and how you can seamlessly submit Form 10IE online.
How to Inform the Switch to New Tax Regime?
The Central Board of Direct Taxes (CBDT) has issued Form 10IE. To opt for the new tax regime, individuals with business income are required to file this Form before filing ITR. And if a taxpayer wishes to switch back to the old tax regime, they must submit Form 10IE again. After a taxpayer with business income chooses the new regime, they are typically allowed to switch back to old regime only once. The new tax regime, introduced to simplify tax structures and offer more flexibility to taxpayers, that provides a choice between the existing tax system and an alternative tax regime with low tax rates but fewer deductions and exemptions.
Introduction to Form 10IE
Form 10IE serves as the gateway for individuals opting for the new tax regime. It enables taxpayers to declare their choice for the alternative tax structure and signifies their intention to forego certain deductions and exemptions available under the existing system.
When to Submit Form 10IE?
According to income tax regulations, individuals with business income must submit this form before the deadline for filing their ITR, typically July 31 (unless extended by the government). Salaried individuals, on the other hand, are not required to submit any form.
Contents of Form 10IE
Given below are the basic details that are required to file Form 10IE
- Name of the Individual/HUF (auto-filled)
- Confirmation – Whether the individual/HUF has any income under the head profit or gains from business or profession.
- PAN (auto-filled)
- Address (auto-filled)
- DOB/Incorporation (in dd/mm/YYYY format)
- Nature of business/profession
- Confirmation – If a taxpayer has any unit in international Financial Services Centre (IFSC)
- Details of previous Form 10IE filed (if applicable)
- Declaration
e-Filing of Form 10IE
The notice clarifies that taxpayers must electronically submit the form which they can complete the process through IT portal to opt for the new tax regime starting from the fiscal year 2020-21. The form submission accepts either a digital signature certificate or an electronic verification code for authentication.
How to submit Form 10IE Online
To initiate the filing process for Form 10IE, log in to the portal using your valid credentials, then navigate to e-File > Income Tax Forms > File Income Tax Forms. Under the Persons with Business/Profession Income tab, locate the form 10IE option and click on ‘File Now’. Next, select the relevant assessment year and click ‘continue’. Fill in the details for the sections mentioned on the application page; note that some information will be prefilled and should be verified for accuracy, including personal details like name, PAN, date of birth, and address.
Additionally, select the appropriate option under the nature of business or profession tab and save any changes. If the taxpayer has any unit in International Financial Service Centre (IFSC), select ‘yes’ and provide additional details such as the name and address of the unit and its nature of business or activities. Once completed, save these details as the final step involves verification: review the information presented on the screen, save it, and then preview all details before proceeding to E-Verify the form 10IE to finalize the filing. You'll have options to choose from to E-Verify the form, and upon completion, you'll receive an acknowledgment number necessary for filing your ITR.
How to download the paper copy of Form 10IE?
Download or print the copy of Form 10IE here.
In conclusion, adopting the new tax regime offers a fresh perspective on managing your tax liabilities efficiently. With the convenience of online submission through Form 10IE, taxpayers can seamlessly transition to the alternative tax structure. Remember, while the new tax regime presents enticing benefits, it's crucial to assess your individual financial scenario and consult with a tax expert like TaxSpanner to not only provide information and guidance but also to make the most suitable choice for your tax savings plan along with personalized assistance. Take charge of your taxes today and explore the possibilities of the new tax regime.
