Change Your Tax Regime Even When You Have A Business Income

How To Opt Out From New Tax RegimeHere’s how one can opt out of the new tax regime.Assessee Not Having Income From Business Or Profession: If the assessee does not have income from business or profession and wants to opt for the old tax regime, there is no need to file Form 10-IEA. Opting out from the new tax regime can be done by indicating a choice of ‘tax regime’ in the ITR form while filing a return of income.There is no limit on how many times you can opt in or out of the new tax regime. An assessee without business or professional income can choose between the new or old tax regimes each year based on which is more beneficial.Assessee Having Income From Business Or Profession: If an assessee has income from business or profession, he can opt out of the new tax regime and switch to the old tax regime by furnishing Form number 10-IEA on or before the due date for filing the return of income. Further, once the option of the old tax regime is exercised by him, it shall apply for the year in which the option is exercised and for the subsequent year.“If an assessee wants to switch back to the new tax regime in a subsequent year, he can do so. But this switching shall be allowed only once, which means once he switches from the old tax regime to the new tax regime, he shall not be allowed to switch back to the old tax regime again until he ceases to have any income from business or profession,” says Singh.“For example, Mr. X has business income in AY 2024-25 and opts for the old tax regime by filing Form 10-IEA. He then switches to the new tax regime in AY 2025-26 by filing the same form. Later in AY 2026-27, he cannot switch back to the old tax regime because a taxpayer with business income can only switch back once. However, he can switch to the old tax regime if he has no business or professional income in AY 2026-27,” adds Singh.

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