- Date : 27/06/2023
- Read: 3 mins
Though the Union Budget 2023 made the new tax regime default, CBDT has issued new rules allowing professionals and consultants to opt for the old regime. Know the details.
- The Union Budget 2023 made changes to the new tax regime and made it a default option for taxpayers
- CBDT has issued a new rule that allows professionals and consultants to use the old regime for tax filing
- A new form would be required if such taxpayers choose the old regime to file their ITR
- If such taxpayers switch to the new tax regime, they would not be allowed to switch back to the old regime again
Ever since the Union Budget 2023 changed the new tax regime and made it tax-saving, many taxpayers are expected to choose the new regime for filing their returns this financial year. However, the old tax regime is not is still available. In fact, the Central Board of Direct Taxes (CBDT) has issued a new rule that allows consultants and professionals to file their income under the old tax regime.
Old v/s New Regime – The Difference
The old tax regime is the existing regime which allows deductions and exemptions under different sections of the Income Tax Act, 1961. The new regime is one that has lower tax rates compared to the old regime but does not allow deductions.
Taxpayers having business income can switch from the old tax regime to the new one only once. Thereafter, switching back to the old regime is not allowed. Salaried taxpayers, however, have the facility of switching from the old tax regime to the new regime and vice-versa every year.
CBDT’s New Rule
CBDT has issued a new guideline for consultants and professionals who report business income in their tax returns. Such taxpayers are allowed to file their taxes under the old tax regime. Here’s what the rule states –
- The new tax regime would be the default option on the income tax portal. Taxpayers would have to choose the old tax regime if they wish to file their returns under the said regime.
- Consultants and professionals would be required to fill out Form 10-IEA to opt for the old tax regime. The form should be filled and submitted before filing the ITR.
- If such taxpayers want to switch to the new tax regime, they would again have to fill out Form 10-IEA and inform the tax department of the same.
- Professionals and consultants can enjoy the old tax regime till they make the switch to the new regime. Once switched, however, the old regime would not be allowed anymore.
- The form should be verified by the electronic code or through a digital signature.
Click here to read the latest on Personal Finance News
The bottom line
If you have your own business and want to file returns under the old regime, know the changed rules. Fill out the relevant form and specifically opt for the old regime to continue enjoying the available deductions and exemptions.
Also Read – Which is better? New tax regime or the old one?