These taxpayers can't switch between old and new regimes every year: Know Form 10-IEA rules, deadline and filing process

The new tax regime has been the default regime from assessment year (AY) 2024-25. While taxpayers without business or professional income can switch between the old and new regimes every year, those with business or professional income face restrictions.

For taxpayers filing ITR-3 or ITR-4 with business or professional income, switching tax regimes is not a yearly choice. If they want to move from the new regime to the old regime, they must file Form 10-IEA. They can later use the form once more to return to the new regime.

But there is an important catch. Once they return to the new regime, they cannot switch back to the old regime as long as they continue to have business or professional income.

In other words, they get one chance to opt out of the new regime and one chance to return to it.

What is Form 10-IEA?

Form 10-IEA allows taxpayers with income under the head “Profits and Gains of Business or Profession” to formally opt out of the new tax regime or re-enter it.

The form is required for individuals, Hindu Undivided Families (HUFs), and Associations of Persons (AOPs), excluding co-operative societies.

Consider Rahul, who has business income and is filing ITR-3 for AY 2026-27.

• Rahul files Form 10-IEA to opt out of the new regime and chooses the old regime.
• He can continue with the old regime in subsequent years without filing the form again.
• If, after a few years, Rahul decides to return to the new regime, he can file Form 10-IEA again to re-enter it.
• Once Rahul returns to the new regime, he cannot choose the old regime again while he continues to have business or professional income.

Therefore, Form 10-IEA can only be filed twice during the taxpayer's lifetime. Once to opt out of the new regime and once to re-enter it.

What is the deadline to file Form 10-IEA for AY 2026-27?

For taxpayers filing ITR-3 or ITR-4 in non-audit cases for AY 2026-27, Form 10-IEA must be filed by 31 August.

If Form 10-IEA is filed after the applicable deadline, it will be treated as invalid. However, it is better to submit this form before filing the ITR, as the form's acknowledgement number and filing date have to be reported in the return.

Once filed, Form 10-IEA cannot be revised or withdrawn during the same assessment year.

What does Form 10-IEA contain?

The form has three sections:

• Basic information: Details such as name, PAN, assessment year, and taxpayer status are generally prefilled.
• Additional information: Details relating to an IFSC unit, if applicable. This section is disabled when opting out of the new regime.
• Declaration and verification: The taxpayer confirms the information and verifies the choice.

How to file Form 10-IEA?

Taxpayers can file the form online through the income tax e-filing portal.

• Log in to the e-filing portal.
• Go to “e-File”, file “Income Tax Forms”, and select “Form 10-IEA”. It can also be searched directly.
• Confirm the business or professional income details and select the applicable ITR due date.
• Complete the required sections, review the details, and proceed with e-verification.
• Verify and submit the form, then save the acknowledgement and transaction ID.
• The filed form and receipt can be viewed under “View Filed Forms” on the e-filing portal.

Disclaimer: This is only for informational and educational purposes. Please consult a qualified expert for the latest laws and regulations.