The Central Board of Direct Taxes (CBDT), via a notification dated October 1, 2020, has clarified that individuals selecting the new tax regime for FY 2020-21 should do as such by filling and documenting a new form, called Form 10-IE. The new form for example Form 10-IE has been advised by the administration. An individual is needed to fill and present this form at the hour of documenting an annual tax return (ITR) in the event that he/she selects the new tax regime for a particular financial year.
A new optional tax regime was announced by the legislature in the Finance Act, 2020. According to this new regime, an individual has to pick either existing tax regime which offers allowances and tax-exceptions or settle on a new tax regime which offers concessional tax rates yet no derivations and tax-exclusions.
Under the newly embedded section 115BAC of the Personal tax Act, 1961, an individual is needed to practice the choice of picking a new tax regime at the hour of recording the annual tax return. In any case, it was not satisfactory how such a choice has to be practiced by an individual. To determine this issue, CBDT has in this form.
The new tax regime is available just to individuals and Hindu Unified Family (HUF). Keep in mind, an individual having a salaried salary and no business pay has the choice to pick between the old and new tax regimes consistently for example he/she can change regimes from year to year. Therefore, such individuals should practice the choice of picking the new tax regime, on the off chance that they want to, for each financial year from 2020-21 onwards. This means that a salaried individual should document this form for consistently for which he wants to pick the new tax regime.
Nonetheless, individuals having business pay are not qualified to pick between the new and old tax regime consistently. When they have decided on the new tax regime, they just have a one-time alternative of exchanging back to the old tax regime in the course of their life. When they switchback, they won’t be allowed to pick a new tax regime again.
Information required in the form
In the told form, the individual is needed to make reference to the accompanying information:
a) Name of the individual/HUF
d) The financial year for which choice is worked out
e) If the individual/HUF has pay under business or calling
f) Date of birth
g) Nature of business/calling, (mandatory if an individual is having pay from business and calling)
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