Do you want to change your tax regime? The new tax regime is now the default, but you’re not stuck with it. If the old tax regime helps you save more tax, you can still choose it. The process for switching, however, depends on whether you have business or professional income.<\/p>\n\n\n\n
If you’re a salaried taxpayer, changing tax regimes is very easy\u2014you can choose the one that works best for you each year when you file your income tax return. But if you have business or professional income, the rules are stricter. You’ll need to file Form 10-IEA, and your ability to switch between the two regimes is limited.<\/p>\n\n\n\n
This article explains who can switch tax regimes, how the process works, when Form 10-IEA is required, the one-time switching rule for taxpayers with business income, and the deadlines you need to meet to keep your preferred tax regime.<\/p>\n\n\n\n
To decide which regime suits you first, see our old vs new tax regime guide<\/a>.<\/p>\n\n\n\n Key takeaways<\/strong><\/p>\n\n\n\n Since FY 2023-24, the new tax regime is the default under Section 115BAC. If you do not choose otherwise, your tax is calculated under the new regime. To use the old regime and its deductions, you have to opt out of the new regime, and the way you do that depends on your income type.<\/p>\n\n\n\n This single point decides everything about how you switch.<\/p>\n\n\n\n If you file ITR-1 or ITR-2, switching is simple and there is no separate form to file.<\/p>\n\n\n\n When you fill your return, it asks whether you want to opt out of the new tax regime under Section 115BAC(6). <\/p>\n\n\n\n \u2192 Select yes to use the old regime, or no to stay in the new <\/a>regime<\/a>.\u00a0<\/p>\n\n\n\n That is the entire process. You can make this choice afresh every year, so you can compare the two regimes each filing season and pick whichever saves more. You can use our old vs new tax calculator to make better decision. <\/p>\n\n\n\n You can also tell your employer at the start of the year which regime you want, so your TDS is deducted accordingly. This is only for TDS, your final choice is made when you file your return, and you can choose a different regime at filing than the one you gave your employer. If you tell your employer nothing, they deduct TDS under the new regime by default. <\/p>\n\n\n\n If you’re still not sure how to go about it, let one of our Qualified Financial Advisors<\/a> help you.\u00a0<\/p>\n\n\n\n If you file ITR-3 or ITR-4, the rules are stricter. To opt for the old regime, you must file Form 10-IEA before the due date for filing your return, 31 August 2026 for non-audit business and professional filers for AY 2026-27. You then quote the form’s acknowledgement number in your ITR.<\/p>\n\n\n\n The important limit is the once-in-a-lifetime rule. A taxpayer with business income can move from the new regime to the old regime only once. If you later choose to return to the new regime, you can do that, but after re-entering the new regime you cannot go back to the old regime again \u2014 you are locked into the new regime for all future years, unless your business income ceases. So for business owners and professionals, opting out of the new regime is a decision to make carefully, not casually.<\/p>\n\n\n\n You also do not need to file Form 10-IEA every year. Once you have opted for the old regime<\/a>, it continues in later years until you choose to withdraw it.<\/p>\n\n\n\n Form 10-IEA is the declaration that lets a taxpayer with business or professional income opt out of the new regime and choose the old one. It replaced the older Form 10-IE, which was used to opt into the new regime back when the old regime was the default. Salaried taxpayers without business income do not need Form 10-IEA \u2014 they choose their regime directly in the ITR.<\/p>\n\n\n\n\n
First, know the default<\/h2>\n\n\n\n
The key distinction: Salaried vs business income<\/h2>\n\n\n\n
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Switching if you are salaried (no business income)<\/h2>\n\n\n\n
Switching if you have business or professional income<\/h2>\n\n\n\n
What is Form 10-IEA?<\/h2>\n\n\n\n
How to file Form 10-IEA online<\/h2>\n\n\n\n