Opting for Old Tax Regime: Fill up Form 10-IEA while filing your ITR
When filing your Income Tax Return (ITR) for the financial year, you have the option to choose between the old tax regime and the new tax regime. The old tax regime offers various deductions and exemptions, which might be beneficial for many taxpayers. However, to opt for the old tax regime, there is a crucial step you must not forget: filling out Form 10-IEA.
Why Form 10-IEA is important?
Form 10-IEA is an intimation from the taxpayer to state that he wishes to opt for the old tax regime. The new tax regime will become the default option for all taxpayers, starting from the year 2023-2024. The taxpayers will still provided the flexibility to choose the old tax regime if it benefits them financially to avail of deductions.
An additional step is needed during the process of opting for the old regime by all those taxpayers who earn income through business or profession and file Income Tax Returns (ITR) through ITR-3 and ITR-4.
ITR-3 and ITR-4 filers are mandated to file Form 10-IEA before the ITR filing due date. Those who will not submit this form in time will automatically get enrolled in the new tax regime which will impact their tax liabilities.
Form 10-IEA is essential because it officially documents the taxpayer’s rights to choosing the old regime, which may include various exemptions and deductions that may not be available in the new regime. This is especially relevant for businesses and professionals who may have significant deductible investments and expenses.
While for salaries taxpayers who file tax returns using ITR-1 or ITR-2 will find the process simpler. They are allowed to state their preference directly in their Income tax returns filing for the old tax regime. Salaried employees do not need to file Form 10-IEA, unlike the filers of ITR-3 and ITR-4. This facility ensures that salaried taxpayers can choose the most tax-efficient option for themselves easily without the need to work additionally.
Various deductions and exemptions can be claimed under the old tax regime and it is the most significant benefit of this regime. It even computes your taxable income at a lower rate slab and your tax liability is reduced. But this is dependent on whether Form 10-IEA is filed correctly and on time. Would you like to see a significant reduction in your tax savings, with such a simple step?
How to fill up Form 10-IEA?
1. Get Access to the Form: Login with your credentials on the income tax e-filing portal. You need to find the form under ‘Income tax Return’ in the ‘e-File’ menu.
2. Form 10-IEA: Locate From e-File in ‘Income Tax Return’ in the ‘File’ menu under ‘Income Tax’ Return.
3. Enter Basic Details: Fields should be prefilled from your income tax returns of the previous year. Except, do check for possible mismatch in PAN name vs Form 26 AS and Aadhaar if you are entering for the first time for which an error message will be returned.
4. Verification: Verify and Submit the Form: The form should be the latest by way of means of the taxpayer. Once downloaded, Fill up the requisite details and rectify the sheets from validating XML-based utility of Form 10-IEA Section as available in e-File-> locate request->Income Tax Return-Fill Form of Income Tax Section->Form 10IE.
Advantages of the Old Tax Regime
1. Deductions Under Section 80C: Claim up to Rs.1.5 lakh under Section 80D for Investments like PPF and ELSS.
2. HRA Deduction: It allows taxpayers to claim a deduction on rent paid.
3. Standard Deduction: Salaried Individuals can get a Rs.50,000 Income Tax rebate.
4. Medical insurance: Deduction of up to Rs.25,000 under Section 80D for medical insurance premiums.
Deadline for Submissions
This form should be submitted earlier in advance than filing your ITR. Otherwise, you may be loaded in the New Regime and omit the tax blessings beneath the preceding regime.
If you do not furnish the required Form 10-IEA (Mandated for ITR-3 and ITR-4 filers), it will be considered that you have opted for the new tax regime and accordingly your tax liability will be calculated. This may result in higher tax costs if the old regime is more favourable to you.
The sooner you understand it better, the more you’ll be able to benefit. So do not ignore file form-10IEA with your IT Return in case you are opting for the old tax regime.
