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. The Format of Form 10-IE is given below:-
“FORM No. 10-IE
[See sub-rule (1) of rule21AG]
Application for exercise/ withdrawal of option under clause (i) of sub-section (5) of section 115BAC of the Income-tax Act, 1961
The Assessing Officer
Sir/ Madam, I, …………………………………………..[name of individual]/ Karta of Hindu undivided family (HUF)…………….[name of HUF]*/ ……………………. , on behalf of……………………… [name and address of the individual/ HUF*, having Permanent Account Number (PAN)…………………….. do hereby exercise/withdraw*the option referred to in clause (i) of sub-section (5) of section 115BAC of the Income-tax Act, 1961 for previous year 20…..-……and subsequent years.
2.The details for this purpose are given below:
(i)Name of the individual/HUF*:
(ii)Whether the individual/HUF*has any income under the head profit or gains from business or profession: Yes/No
(iv)Date of Birth/Incorporation*:dd/mm/yyyy
(v)Nature of Business/Profession*:
3. (i) Whether the individual/ HUF has any Unit in International Financial Services Centre (IFSC), as referred to in sub-section (1A) of section 80LA: Yes/No
(ii) If answer to (i) is Yes, provide following details:
(Add number of columns depending on number of Units):
Unit 1Unit 2Unit 3(1)(2)(3)
(4) Name of Unit Address of Unit Nature of activities undertaken in Unit4.
(i) Whether option under clause (i) of sub-section (5) of section 115BAC has been exercised in Form 10-IE for any earlier previous year/ years and is now being withdrawn(to be activated if withdrawal option is selected) : Yes/No
(ii) If yes, previous year in which option was exercised: 20….-20…..
(iii) Date on which option exercised in Form 10-IE:d/mm/yyyy
5.I understand that the option under clause (i) of sub-section (5) of section 115BAC, once exercised ina previous year, cannot be withdrawn for the same previous year and can subsequently be withdrawn only once for any other previous rendering me/ Individual/ HUF* ineligible for exercising option under section 115BAC in terms of proviso to sub-section (5) thereof.
6.I do hereby further affirm that the conditions stipulated in section 115BAC are and shall be satisfied by me/ Individual/ HUF*(to be activated in case where the option is being exercised).
*Delete whichever is inapplicable.
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 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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