Can we freely switch to and from New Regime?

Income Tax
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1

I have conflicting information regarding this, I originally thought it was impossible to switch from New Regime back to Old Regime but a friend told me that salaried individuals can freely switch between the regimes in each FY.

Is this true for everyone? Is this true at all?

I pay tax on a presumptive basis so I always file for ITR-3 or 4 (depending on investments made) so does that exclude me from being able to freely switch between regimes?

Up until now I have always opted for old regime only because I didn’t want to get stuck with new regime for the rest of my life or until the old regime is abolished.

2

Hi @Bobeat

Switching can be done easily every year by person not having Business Income. However, in case of persons having Business Income, this can be done only once by filing up form-10IEA.

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3

Does that include professional income under 44ADA? The majority of my income comes under that section.

4

44ADA also comes under Business Income and thus opt-in//opt-out is possible only as specified in the Act and by filing up form-10IEA.

5

But, when the individual gets income from a business, they can switch their regimes once.

6

Hey @Bobeat,

If you have business/profession income and file ITR-3 or ITR-4, you can switch the regimes only once and you’ll have to file Form-10IEA to opt for the old regime.

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7

Where is this specified in the Act?

Thank you for the clarification Surbhi, to make sure that I have understood you correctly, you are saying that I can file for new regime this year and switch to old regime in the next FY (only 1 switch), am I correct?

Up until now I’ve only been filing under old regime if that matters, I have never filled out Form 10IEA.

8

Yes, you can opt for the old regime and again switch to the new regime. But once you do this, you cannot opt for the old regime again.