To switch between old and new tax regimes while filing your Income Tax Return (ITR) for FY 2024-25 (AY 2025-26), the process depends on whether you have business or professional income or only salary/other income. Here’s a detailed guide:
1. For Individuals with Salary or Other Non-Business Income
✔ You can switch between old and new regime every year while filing your ITR.
✔ No special form or declaration is needed beforehand.
How to switch at the time of ITR filing:
✅ Step 1: Login to the Income Tax e-Filing portal
✅ Step 2: Select the applicable ITR form (commonly ITR-1 or ITR-2)
✅ Step 3: While filling the ITR, you will see a section asking:
“Whether opting for taxation under section 115BAC?”
- Yes: Means you are choosing the New Tax Regime
- No: Means you are opting for the Old Tax Regime
✅ Step 4: Choose accordingly and proceed with your filing.
2. For Individuals with Business or Professional Income
✔ You can switch regimes, but with restrictions.
✔ You can opt for the new regime only once; if you opt out later, you cannot switch back to the new regime unless you cease to have business/professional income.
Filing Form 10-IEA:
✅ If you have business/professional income and want to opt for the new tax regime, you must file Form 10-IEA before filing your ITR.
✅ Form 10-IEA is available on the Income Tax portal under e-File → Income Tax Forms.
✅ This declaration is valid as per provisions of Section 115BAC(6).
✅ If you had earlier opted out of the new regime, you cannot opt back in unless your business/profession income ceases.
3. Summary Table for Switching
Type of Taxpayer | Switching Between Regimes Allowed? | Form Required |
---|---|---|
Salary/Other Income Only | Yes, every year | No separate form |
Business/Professional Income | Yes, but only once (with restriction) | Form 10-IEA |
Important Notes
- New tax regime is now the default regime from FY 2023-24 onwards. If you want to opt for the old regime, you must actively select it while filing ITR.
- Always calculate your tax liability under both regimes before filing, to decide which is more beneficial.