Form 10 IE: What is it and How to File it?

To advise the Central Board of Direct Taxes (CBDT) of their election to exercise or withdraw from tax liability under section 115 BAC of the Income Tax Act, 1961, taxpayers must complete Form 10-IE, an electronic application form. Taxpayers were offered a choice between the new and the old tax regimes. Taxpayers may pay a lower tax rate on their income with the new Form 10-IE tax system. Therefore, if the new tax system is chosen, taxpayers will not be able to take advantage of the income tax deductions detailed on Form 10-IE as they would have under the previous tax regime.

Before submitting their Income Tax Return (ITR) for the applicable financial year, taxpayers must make their preference known. Form 10-IE Income Tax has been made available by the CBDT.

See also: Types of Income tax return forms

Form 10-IE of income tax: Information needed to file

Below, we have outlined the very minimum information you will need to submit a Form 10-IE:

• Name of the individual/HUF
• PAN number
• Verification of the existence of any income under “Profit or gains from business and profession” for the person or HUF.
• Date of birth/date of incorporation
• Address
• Nature of business/profession (mandatory in case of business income)
• Details of Form 10-IE previously filed
• Verification of whether the taxpayer possesses any of the IFSC (International Financial Service Centre) units indicated in sub-section (1A) of section 80LA, expressed as a “yes” or “no.” In the event that the response is “Yes,” specifics regarding the unit must be given.
• Declaration

Form 10-IE of income tax: New tax regime

The tax rates under the new system are lower, but it is important to remember that many of the deductions available under the previous scheme no longer apply. The new regime is different from the previous tax system as it features lower tax rates and higher tax slabs.

You cannot be in both the old tax system and the new one at the same time. This must be completed before the income tax returns for the fiscal year may be submitted.

You must notify the IT department through form 10-IE of your intention to opt for the new tax system before submitting your income taxes. Form 10-IE will be required under the new tax system beginning with the 2020-2021 fiscal year (or the 2021-2022 academic year). Individuals and Hindu Undivided Families (HUFs) have the option of switching between the previous and new tax regimes by submitting form 10-IE.

Form 10-IE of income tax: How to pick a regime?

If you get a salary, your company will require you to make a declaration specifying which tax system you prefer.

1. Your company will request you to make a statement on which of the two regimes you choose to follow. Your employer will provide you with a due date by which you must make your choice on Form 10-IE. Your employer will determine the amount of TDS owed based on the regime you choose. If you do not report any changes to your tax withholding status, the company will use the previously chosen method to determine your TDS due.
2. Your company has yet to request a statement on your preferred regime; the company will determine the TDS owed using the previous tax structure. In addition to providing Form 16, the company will also provide information on the selected TDS regime. However, in any case, the worker is free to change tax regimes whenever they choose, regardless of which they first reported to their employer.

Form 10-IE of income tax: How to file it?

• It is not possible to revoke the taxpayer’s election to pay tax under the new tax system for the prior year after it has been made. After that, the taxpayer may only request a withdrawal once for each prior year in which they were unable to use the option.
• Only the HUF’s designated Karta or an authorized representative may sign this document.
• Either a digital signature or an Electronic Verification Code must be used when filing income tax form no. 10-IE online (EVC).
• The director-general of income-tax is the last arbiter in cases involving Form 10-IE under the Income Tax Act (Systems).
• Starting FY 2020-21, you may use this form.
• Failure to submit this form will result in Income Tax being computed using the previous tax rates.
• Here is the downloadable application: www.mastersindia.co

FAQs