The Central Board of Direct Taxes (CBDT) has issued a notification specifying the process consultants, professionals – having business income– should follow to continue with the old tax regime from the current financial year, i.e., FY 2023-24. The change in the process has been introduced as from this financial year, the new tax regime has become the default tax regime option. CBDT issued a notification on June 21, 2023 announcing the procedural changes consultants and professionals must follow now, and the necessary changes regarding the same in the Income Tax Rules, 1962.
It is important to note that the Budget 2023 has made the new tax regime a default tax regime. This means that the incomes earned in the current FY 2023-24 (i.e., between April 1, 2023 and March 31, 2024) will be taxed at the new income tax slabs rates under the new tax regime. However, the taxpayer has the option to opt for the old tax regime.
Chartered Accountant, Naveen Wadhwa, DGM, Taxmann.com says, “The CBDT has issued a new form, Form 10-IEA, which the consultants, professionals would have to fill to continue with the old tax regime from FY 2023-24. This form would allow the individuals having business or professional income to continue with the old tax regime and claim eligible tax exemptions and deductions.”
“From FY 2023-24, as new tax regime has become default tax regime. Consultants, professionals wanting to continue with the old tax regime in a financial year, will specifically have to opt for it. Once opted, they would have once in a lifetime option to switch to new tax regime. Once new tax regime is opted, they cannot opt for old tax regime again,” adds Wadhwa.
Remember, unlike salaried individuals who can switch between the two tax regimes according to their preference, consultants and professionals cannot do the same. Till FY 2022-23, once they have opted for the new tax regime, they can switch back to the old tax regime only once in their lifetime. Once switched back they cannot opt for the new tax regime.
Dr. Suresh Surana, Founder, RSM India – a business consulting firm says, “Any eligible taxpayer deriving income from business and profession and intending to opt for the old tax regime would be required to furnish Form-10-IEA on or before the due date u/s 139(1) for filing ITR (either July 31 or October 31 as the case maybe). It seems that salaired taxpayers (not having business income) can opt for the old tax regime directly in the ITR to be filed on or before the due date u/s 139(1) (usually July 31). 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. Till FY 2022-23, the taxpayers (with business income) intending to opt for the new tax regime were required to file Form 10-IE on or before the due date of filing ITR.”
Abhishek Soni, CEO, Tax2Win.in says, “From FY 2023-24 if any professional, consultant or individual businessman wants to opt for the old tax regime to file his ITR, then for them a new form called FORM 10 IEA has been launched. FORM 10IEA will be filed before filing ITR. To withdraw from the default new tax regime from FY 23-24, then also FORM 10IEA would be filed.”…..Read More
Source By: economictimes
