How to opt out of New Tax Regime and choose old tax regime – Step by step guide & procedure

How to opt out from New Tax Regime and choose old tax regime for AY 2024-25. Step by step procedure for option to be exercised u/s 115BAC

With effect from Assessment Year 2024-25 (FY 2023-24), the new tax regime under section 115BAC has been made as the default one.

The consequence of making the New Tax Regime “default” is that the new tax slabs and rate as prescribed under New Tax Regime under section 115BAC shall automatically apply to all the income tax return unless the assessee opts out of the new tax regime.

However, depending on the income structure or personal choice, an assessee may wish not to be governed by the New Tax Regime but continue to be covered by the old tax regime.

Sub section (6) of section 115BAC provides for an option to the assessee to opt out of the now default new tax regime and to continue to be governed by the old tax regime. As per the provisions, the assessee may exercise an option to opt out of the new tax regime.

The option can be exercised by:

(i) person having business/professional income by online filing Form No. 10IEA on or before due date prescribed u/s 139(1) for filing return of income ; and

(ii) in case of person not having business/professional income, this option can be filled in the return of income furnished within due date applicable as prescribed under section  139(1). 

Procedure for opting out from new tax regime / choose old tax regime is as under:

Opting out from new tax regime and choosing old tax regime for AY 2024-25

(1) Exercise of Option u/s 115BAC by person not having business/professional income 

1.1 The option is not required to be filed online in Form No, 10IEA. The option can be exercised in the return of income itself.

1.2 The option to choose old tax regime can be filled by choosing “No” under General Information in the ITR itself.

(2) Exercise of Option u/s 115BAC by person having business/professional income

2.1 Login to your e-filing account

2.2 Under menu e-File > go to Income Tax Forms > File Income Tax Forms

2.3 Click over the Tab “Persons with Business/Professional Income” and click on ‘File Now” against Form No. 10-IEA

2.3 The next window will take you to the “Application for exercise of option under clause (i) of sub-section (6) of section 115BAC or withdrawal of option under the proviso to sub section (6) of section 115BAC.

Click on “Let’s Get Started” 

2.4 In the next window, select the Assessment Year 2024-25 and click Continue

2.5 Under the Next Window :

(i) Choose “Yes” in response to question “do you have income under the head profits and gains from business or profession during the assessment year?”

(ii) Choose due date for filing of ITR as applicable to you 

2.6 On the next window a prompt shall be displayed to the effect that you are exercising the option to opt out (in your case) from new tax regime and you shall file the return within due date prescribed under section 139(1). In case of belated filing of return of income the benefit of eeercising the option to opt out from the new tax regime shall not be available.

2.7 The Next window shall take you to the following page where you are required to provide details of three sections, namely (i) Basic Information, (ii) Additional Information and (iii) Declaration and Verification.

2.8 Under the “Basic Information” tab, ensure that “Opting out” option is checked as under:

2.9 The information in “Additional Information” Tab is auto populated. Please ensure that no incorrect option is checked therein.

2.10 In the next window, fill the verification form by selecting the required field and save the form

3.11 Preview and File the form. In the last, preview the form to ensure all the information selected/filled are correct and file the form with OTP based e-verification. 

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