Overview

The Finance Act 2023 has amended the provisions of Section 115BAC w.e.f AY 2024-25 to make new tax regime the default tax regime for the assessees being Individual, HUF, AOP (not being co-operative societies), BOI or Artificial Juridical Person. However, the eligible taxpayers have the option to opt out of new tax regime and choose to be taxed under old tax regime. The old tax regime refers to the system of income tax calculation and slabs that existed before the introduction of the new tax regime.

In case of "non-business cases", option to choose the regime can be exercised every year directly in the ITR to be filed on or before the due date specified under section 139(1).

In case of taxpayers having “income from business and profession” and who want to opt out of new tax regime, the assessee would be required to furnish Form 10-IEA on or before the due date u/s 139(1) for furnishing the return of income. Also, for the purpose of withdrawal of such option i.e. opting out of old tax regime shall also be done by way of furnishing Form No.10-IEA.

New tax regime is the default tax regime. However, taxpayers can opt for the old regime.