ITR Filing 2025: How can salaried taxpayers switch between new and old tax regimes? What are the rules for those doing business?

ITR Filing 2025: While filing income tax return, salaried taxpayers can choose new or old tax regime every year. Whereas, those with business income can switch only once. In such a situation, it is important to choose the right option, otherwise you may have to pay more tax. Know the complete process of switching tax regime.

ITR Filing 2025: The process of filing income tax returns for the financial year 2024–25 (assessment year 2025–26) is going on. In such a situation, a confusion is faced by the taxpayers whether they should choose the old tax system or file returns in the new tax system which has become the default.

The new tax system was launched by the government in 2020. It has fewer tax slabs, but most of the exemptions and deductions are not available. At the same time, the old system can still prove to be better for those taxpayers who want to take advantage of deductions like 80C, HRA or 80D.

Salaried taxpayers can change every year

Individuals who file under ITR-1 or ITR-2 can change the tax system every year. In the ITR form, they will be asked, ‘Do you want to come out of the new tax system under section 115BAC (6)?’ Answering ‘Yes’ to this, they will come to the old system, while choosing ‘No’ will keep them in the new default system.

Limited options for business taxpayers

If the taxpayer is showing business or professional income under ITR-3 or ITR-4, then he can go back to the old system only once. Once returned to the new system, it will not be possible to go back to the old system again.

For this, he will have to file Form 10-IEA, which is required to be filed before ITR and by 15 September 2025. This form can be filled online by visiting the incometax.gov.in portal.

Process to fill Form 10-IEA

  • Log in to incometax.gov.in (via PAN)
  • Go to e-File > Income Tax Forms > File Income Tax Forms.
  • Search Form 10-IEA and click on ‘File Now’
  • Select Assessment Year 2025–26.
  • Confirm your income type (business/profession) and changes.
  • Check the details and submit using Aadhaar OTP, EVC or DSC.

After submitting, you will get an acknowledgement number and transaction ID.

If the option is not selected, the new system will be applicable

If a taxpayer does not select the tax system in the form, then his tax liability will be calculated according to the new default system. In such a situation, for those who have planned investments and deductions throughout the year according to the old system, this may prove to be harmful.

What is the advice of tax experts?

According to tax experts, before filing the return, definitely compare your tax liability in both the tax systems. For this, you can take the help of an online tax calculator or an expert, so that you do not have to pay more tax due to the wrong option. The Income Tax Department has introduced a tax calculator, through which you can understand which tax regime will be better for you.

The post ITR Filing 2025: How can salaried taxpayers switch between new and old tax regimes? What are the rules for those doing business? first appeared on informalnewz.

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