Consultants or professionals who earn income from businesses will now have the option to choose the old tax regime in the current financial year.
On June 21, the Central Board of Direct Taxes notified the form that such individuals will have to fill out if they want to continue with the old tax regime.
The Finance Act, 2023 has made the new tax regime the default option.
Form 10-IEA has been introduced now via the notification, specifically for business professionals to opt out of the new tax regime and retain the old one, according to Akhil Chandna, partner at Grant Thornton Bharat.
The new tax regime is a de facto now. So, to continue with the old one, they have to provide details in this form and fill it before the date of filing the tax returns—either electronically with a digital signature or with an OTP.Akhil Chandna, Partner, Grant Thornton Bharat
While salaried individuals can switch between the two tax regimes every year, consultants and professionals can only switch from the new tax regime to the old tax regime once in their lifetime. This means that if a consultant or professional switches to the new tax regime in fiscal 2023, the person will not be able to switch to the old tax regime in FY24 or any subsequent fiscal.
One of the reasons why people earning from businesses will not be able to switch between older and newer tax regimes more than once is because they are otherwise eligible for allowances like depreciation, said S. Vasudevan, executive partner at Lakshmikumaran and Sridharan.
"Every switch-over will lead to a new set of complications, like the recalculation of the written-down value of assets," Vasudevan said. "On the other hand, normal salaried employees can have this switch-over option every year."
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