ITR Filing FY 2024-25: Switching Income Tax Regimes? These Forms Are Mandatory

If you are thinking about e-filing your Income Tax Regime (ITR) for the assessment year 2025-26, the choice of the income tax regime plays a pivotal role.

While the new tax regime is the default tax regime from the financial year 2023-24, you can still switch from the new tax regime to the old regime.

How Can You Switch From New To Old Tax Regime?

It is easy for salaried individuals to switch from one regime to another every year, as long as they file the original return of income within the due date.

The taxpayer needs to select the appropriate question in the ITR Form 1 or ITR Form 2 by clicking on 'Yes' or 'No' in response to the question: "Do you wish to exercise the option u/s 115BAC(6) of opting out of the new tax regime?"

By default the answer is pre-filled with 'No'.

If ITR is filed after the due date, the default tax regime or the New Tax Regime will automatically apply. However, if a revised return is filed, taxpayers can still exercise the option to choose the regime, as long as the original return was filed, the taxpayer can still switch their regime, if the original return was filed within the due date.

But if the they opt out of the new tax regime, they are then allowed to switch back to switch back to it only once.

If the taxpayer reverts to he new income tax regime, they cannot opt for the old regime again in the future. To opt out of the new regime, a declaration must be submitted in Form 10-IEA before the due date for filing the original return.

Additionally, for those who are business-owners or have professional income under presumptive taxation, need to opt for the ITR Form 4 (Sugam) for the financial year 2024-25 and the form now seeks more details from individual taxpayers opting out of the new income tax regime.

Therefore, it is very important for taxpayers to decide and make a final selection between the two income tax regimes, taxpayers should carry out a comparative analysis to determine which is more beneficial for them.

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