The Government of India has given the opportunity to the taxpayers for selecting either of two income tax regimes. The new tax regime was launched in the Union Budget 2020. Both of these regimes have pros and cons. Thus, Taxpayers must choose wisely between these two as both of these regimes involve complex concepts necessary for ITR Filing. This article discusses one of the most essential concepts of the new tax regime including Form 10IE.
What are income tax slabs rates for the AY 2022-23 [F.Y 2021-22]?
| Existing Tax Regime | New Tax Regime u/s 115 BAC | ||
| Income Tax Slab | Income Tax Rate | Income Tax Slab | Income Tax Rate |
| Up to ₹ 2,50,000 | Nil | Up to ₹ 2,50,000 | Nil |
| ₹ 2,50,001 – ₹ 5,00,000 | 5% above ₹ 2,50,000 | ₹ 2,50,001 – ₹ 5,00,000 | 5% above ₹ 2,50,000 |
| ₹ 5,00,001 – ₹ 10,00,000 | ₹ 12,500 + 20% above ₹ 5,00,000 | ₹ 5,00,001 – ₹ 7,50,000 | ₹ 12,500 + 10% above ₹ 5,00,000 |
| Above ₹ 10,00,000 | ₹ 1,12,500 + 30% above ₹ 10,00,000 | ₹ 7,50,001 – ₹ 10,00,000 | ₹ 37,500 + 15% above ₹ 7,50,000 |
| ₹ 10,00,001 – ₹ 12,50,000 | ₹ 75,000 + 20% above ₹ 10,00,000 | ||
| ₹ 12,50,001 – ₹ 15,00,000 | ₹ 1,25,000 + 25% above ₹ 12,50,000 | ||
| Above ₹ 15,00,000 | ₹ 1,87,500 + 30% above ₹ 15,00,000 | ||
What are the benefits of availing income tax rate as per New Tax Regime u/s 115 BAC?
The basic benefit of the new tax regime is lower income tax rates as compared to old tax slabs but on the other hand the assessee has to forgo around 70 exemptions and deductions presently available in income tax provisions.
So you have to opt for the new tax regime i/s 115BAC wisely.
What are the restrictions if New Tax Regime u/s 115BAC availed?
- Cannot claim tax deductions and exemptions such as 80C & 80D
- Cannot claim Standard deduction u/s 16
- Cannot claim Interest on home loan u/s 24(b)
- Cannot claim Sec 10(5) [Leave Travel Concession]
- Cannot claim Sec 10 (13A) [House Rent Allowance]
- Cannot claim Sec 10(14) [special allowances except following prescribed items]
- Cannot claim Sec 10(17) [Allowances to MPs or MLAs]
- Cannot claim Sec 16 [Standard deduction, entertainment allowance & professional tax]
- If business income holders once opt for a new tax regime u/s 115 BAC cannot subsequently withdraw the option.
- Need to file Form 10IE before ITR filing by business income taxpayer
What is Form 10IE?
Taxpayers who wish to claim relief under section 89 need to file Form 10IE. It is mandatory for taxpayers to file Form 10IE if they want to claim the benefits of section 89(1). Taxpayers must have a registered account on the official Income Tax portal to access the Form 10IE.
Important Note: The relief is given through Form 10IE filing if the total income assessed is at a greater rate now than it would have been. You can only apply for this relief by providing information about your income on Form 10E.
Important Elements of Form 10IE
- Personal Information- PAN and Contact Details
- Annexure I (Arrears) – Salary / Family Pension received in arrears
- Annexure I (Advance) – Salary / Family Pension received in advance
- Annexure II & IIA (Gratuity) – Payment in nature of Gratuity in respect of past services
- Annexure III (Compensation) – Payment in nature of compensation from the employer or previous employer at or in connection with termination of employment after continuous service of not more than 3 years or where the unexpired portion of the term of employment is also not less than 3 years.
- Annexure IV (Pension) – Payment in commutation of pension
- Declaration
Stepwise Procedure to File Form 10IE through Online Mode
- Visit the official income tax portal at: https://www.incometax.gov.in/iec/foportal and sign in using your credentials.
- Go to the tab ‘e-file’ and select the option ‘Income Tax Form’.
- Select ‘File Income Tax Forms’ and choose option from the below as per your applicability:
- Person with Business/ Professional Income
- Person without Business/Professional Income
- Persons not dependent on any source of Income.
- An option to file form 10E or Form 10IE will appear along with an option to select Assessment Year.
- Select the Assessment Year and Click on the Option ‘Let’s Get Started’ and file the Form 10E.
What if you do not file Form 10 IE?
The Income Tax Department [CPC] shall treat your income under the old regime tax slab without claiming 80C, D0D and other deductions. Hence tax liability shall be increased along with the interest on late payment under CPC 143(1) order.
FAQs
Q; When should I file Form 10IE?
Ans: Form 10IE has to be filed before filing your Income Tax Return.
Q; Is Form 10IE mandatory to file?
Ans; Yes, it is mandatory to file Form 10IE if you want to opt for new tax regime and have Income under the Head “Profits and Gains of Business and Profession.”
Q; What will happen if Form 10IE is applicable to me and I fail to file before filing ITR?
Ans; In case you do not file form 10IE before filing your ITR, you can not opt for new tax regime.
Q; While submitting the form 10IE, displays “Invalid Input” or “Submission Failed!”. What should I do?
Ans; Before, filing Form 10-IE please update “Contact Details” (or “Key Person Details” in case you are an HUF) under “My Profile” and ensure that all mandatory fields are filled.
After updating your Contact details from your profile, you can re-login and try again.
Q; While filing Form 10IE, the AO details or Date of Birth/ Incorporation getting pre-filled. What should I do?
Ans: Please delete the old draft of the form by clicking on “Delete Draft” and try re-submitting Form 10-IE.
Q; While submitting the form 10IE, designation of Karta of HUF is not getting pre-filled under Verification tab. What should I do?
Ans; You are requested to update the “Key Person Details” under “My Profile” section. Re-login to the e-Filing portal and try again.
Q; I do not have any business income. While filing Form 10IE, I am unable to select “No” under “Basic Information” tab. What should I do?
Ans; In case you don’t have any business income and are required to file ITR 1/ ITR 2, there is no need to file Form 10-IE in order to opt for the new tax regime under Section 115BAC of the Income Tax Act, 1961. The option to exercise the benefit under Section 115BAC, in case you have business income, can be claimed while filing the respective ITR form (ITR 1/ ITR 2).
Moreover, If you want any other guidance relating to ITR Filling, please feel free to talk to our business advisors at 8881-069-069.
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