Can You Change Tax Regime After Filing ITR?
- PRITI SIRDESHMUKH
- 3 hours ago
- 9 min read
Taxpayers in India often wonder if they can switch their tax regime after filing their Income Tax Return (ITR). The Income Tax Act provides two options: the old regime with deductions and exemptions, and the new regime under Section 115BAC with lower rates but limited exemptions. While salaried individuals may have flexibility through revised returns, business and professional taxpayers face tighter restrictions. Understanding these rules is essential to avoid mistakes, penalties, or missed benefits while filing returns.
Table of Contents
Can You Change Tax Regime After Filing ITR?
The Indian Income Tax system provides taxpayers with two choices: the old regime, which allows exemptions and deductions, and the new regime under Section 115BAC, which offers simplified lower slab rates but with limited deductions. Once an Income Tax Return (ITR) has been filed, the possibility of switching between these regimes is highly restricted. While salaried individuals can revise their return before the deadline to change the regime, business and professional taxpayers have limited scope, as they are bound by stricter rules. Understanding these rules ensures that taxpayers make informed decisions before filing their ITR.
Tax Regime Rules for Salaried Individuals
Salaried employees enjoy more flexibility compared to those with business or professional income. They are allowed to choose either the old regime or the new regime each year while filing their ITR. If a salaried taxpayer mistakenly selects the wrong regime during filing, they can still rectify it by submitting a revised return under Section 139(5) before the due date. This revised filing replaces the original ITR, allowing the taxpayer to officially change their tax regime for that assessment year. However, once the due date passes, the choice of regime becomes final and cannot be altered. No separate form, such as Form 10-IEA, is needed in this case, which makes the process simpler for salaried taxpayers.
Tax Regime Rules for Business and Professional Income
The rules are stricter for individuals with business or professional income. They cannot switch between regimes every year as salaried taxpayers do. Once they opt for the new tax regime, switching back to the old regime is permitted only once in a lifetime. To make this switch, they must file Form 10-IEA before the due date of filing the return. After this one-time change, they are locked into the old regime permanently and cannot opt back for the new regime in subsequent years. Furthermore, if a business or professional taxpayer wishes to change their regime after filing, they may only do so by filing a revised return before the due date. Once the deadline passes, the choice is irrevocable for that year.
Deadline to Change Tax Regime
The option to choose or switch a tax regime must be exercised before the due date for filing the ITR, which is generally September 15 for individuals. For salaried taxpayers, the revised return facility provides a chance to correct the regime selection if a mistake was made. For business or professional taxpayers, the deadline is even more critical, as filing Form 10-IEA must also be completed before the same due date if they are opting to move from the new regime back to the old. Once this deadline passes, the tax regime selected during filing becomes final for that assessment year.
Summary Table: Switching Tax Regimes
Taxpayer Category | Can Switch After Filing? | Conditions |
Salaried (No Business Income) | Yes, before due date via revised return | No separate form required; locked after due date |
Business/Professional Income | Limited | Can switch once in lifetime from new to old regime via Form 10-IEA; must file before due date |
Practical Implications for Taxpayers
Practical implications of the tax regime choice are far-reaching and go beyond a simple preference for deductions or lower slab rates. Since the government has made the new tax regime the default from FY 2023–24, every taxpayer who does not actively select the old regime will automatically fall under the new system. This is particularly significant because the new regime, while offering simplified and lower tax rates, restricts the availability of common deductions such as HRA, Section 80C investments, and other allowances that many individuals rely on to reduce taxable income.
For salaried individuals, there is still flexibility since they can make this choice each year when filing their return. If they find that their deductions and exemptions outweigh the benefits of the new regime, they can continue with the old regime simply by opting for it during the ITR filing process. This year-on-year flexibility allows salaried taxpayers to compare both regimes annually and make the selection that best suits their circumstances.
The situation is more rigid for business owners and professionals. Once they choose the new regime, they can only switch back to the old regime one time in their lifetime. This one-time switch must be carefully planned and executed by filing Form 10-IEA before the due date of filing the ITR. After making this change, they are permanently locked into the old regime for all future assessment years. If the deadline is missed or the form is not filed, the taxpayer remains in the default new regime, regardless of whether it results in a higher tax liability.
Missing the due date for filing the return or failing to submit the required form has significant financial consequences. A taxpayer who is locked into the default new regime may end up paying more tax if they were eligible for substantial deductions under the old system. For example, individuals with housing loans, higher investments under Section 80C, or medical insurance premiums often benefit more under the old regime. Losing this option because of procedural lapses can lead to a heavier tax burden that cannot be corrected once the deadline passes.
These rules underline the importance of carefully assessing one’s tax position before filing the return. Taxpayers need to compare their potential liability under both regimes, considering all deductions, exemptions, and income types, and then make an informed choice. For business and professional taxpayers, the decision is even more critical because it affects not only the current assessment year but also all future filings due to the restrictions on switching. Ultimately, advance planning and timely compliance are the only ways to ensure that taxpayers maximise their tax savings and avoid being locked into a less favourable regime.
Role of TaxBuddy in Making the Right Choice
Deciding between the old and new tax regimes can be complex, especially when deductions and exemptions vary significantly for different individuals. Platforms like TaxBuddy provide clarity by helping taxpayers calculate their tax liability under both regimes, ensuring an informed choice is made before filing. TaxBuddy also simplifies the filing process, reducing errors and guiding taxpayers on compliance steps such as filing revised returns or Form 10-IEA where applicable. With both self-filing and expert-assisted plans, it allows taxpayers to file returns confidently while maximizing tax efficiency.
Conclusion
The ability to change tax regimes after filing ITR is limited, with salaried taxpayers having some flexibility through revised returns, while business and professional taxpayers face more permanent restrictions. Careful planning before filing ensures that taxpayers avoid errors and make the most tax-efficient decision. For assistance in comparing regimes, filing returns, or managing compliance, it is advisable to rely on digital tax platforms. For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy caters to different types of taxpayers by offering both self-filing and expert-assisted options. The self-filing plan is designed for individuals who are comfortable entering their details on their own with the support of an AI-driven interface that minimizes errors. On the other hand, the expert-assisted plan provides professional guidance where certified tax experts review, prepare, and file the return to ensure complete accuracy. This flexibility allows taxpayers to choose a plan based on their confidence, time availability, and complexity of their tax situation.
Q2. Which is the best site to file ITR?
The best platform to file an Income Tax Return depends on ease of use, security, and support. While the government’s income tax e-filing portal is the official site, many taxpayers prefer user-friendly platforms like TaxBuddy. It combines automation, error checks, and expert support to simplify the process, making it an efficient alternative. For those dealing with complex returns such as capital gains, F&O, or business income, expert-assisted platforms like TaxBuddy are often more reliable than using the portal alone.
Q3. Where to file an income tax return?
Taxpayers can file their returns directly on the official Income Tax Department website or through authorized e-filing platforms. Filing through the department’s portal is free but may feel technical for some users. Platforms like TaxBuddy offer an easier process by guiding users step-by-step, verifying details, and ensuring compliance. This additional support helps taxpayers avoid errors and penalties, especially when dealing with multiple income sources or deductions.
Q4. Can salaried individuals change their tax regime every year?
Yes, salaried employees without business or professional income can decide whether to choose the old tax regime with exemptions or the new tax regime with lower rates every year. The decision is made at the time of filing their ITR. If an error is made, they can file a revised return under Section 139(5) before the due date to correct their selection. However, once the deadline passes, the chosen regime becomes final for that assessment year. This flexibility gives salaried individuals an annual opportunity to compare and select the most beneficial option.
Q5. What is the role of Form 10-IEA in switching tax regimes?
Form 10-IEA plays a critical role for taxpayers with business or professional income. If such taxpayers wish to switch from the default new regime to the old regime, filing Form 10-IEA before the ITR due date is mandatory. Without this form, their choice cannot be registered. Moreover, once they switch back to the old regime using this form, they cannot opt for the new regime again in the future. For salaried taxpayers, this form is not required, which makes their regime selection simpler.
Q6. Can a revised return help in changing the tax regime?
Yes, a revised return can allow salaried taxpayers to change their tax regime. If they initially file under one regime but later realise that the other is more beneficial, they can submit a revised return before the deadline under Section 139(5). This revised return cancels the earlier one and updates the chosen regime. However, for business or professional taxpayers, the scope to change regimes through a revised return is much narrower, as they are bound by stricter one-time switch rules and the mandatory filing of Form 10-IEA.
Q7. What happens if the due date for filing ITR has passed?
If the due date for filing ITR has passed, taxpayers lose the flexibility to change their tax regime for that assessment year. The choice made during the original filing becomes locked. Even if the taxpayer realises they could have paid lower taxes under a different regime, no further changes can be made once the deadline expires. For this reason, taxpayers are advised to compare both regimes thoroughly before filing their return or consult expert support from platforms like TaxBuddy to avoid costly mistakes.
Q8. Is the new tax regime the default option?
Yes, from FY 2023–24 onwards, the new tax regime has been designated as the default under Section 115BAC. This means that unless a taxpayer actively opts for the old regime while filing their ITR, the new regime automatically applies. For salaried taxpayers, the regime can be selected directly in the ITR form. For business and professional taxpayers, opting for the old regime requires filing Form 10-IEA in addition to the ITR before the due date.
Q9. How many times can a business owner switch back to the old regime?
Taxpayers with business or professional income are allowed to switch back to the old regime only once in their lifetime after having opted for the new regime. Once this switch is made, they are permanently locked into the old regime and cannot revert to the new regime again in subsequent years. This rule is designed to maintain consistency and prevent frequent changes that could complicate compliance. It highlights why careful consideration is essential before making the initial choice.
Q10. Does failing to file Form 10-IEA lock a taxpayer into the new regime?
Yes, if a taxpayer with business or professional income does not file Form 10-IEA by the ITR deadline, they remain in the default new regime for that assessment year. Even if they intended to opt for the old regime, the omission of this form will prevent the switch. This emphasizes the importance of filing Form 10-IEA correctly and on time. Salaried taxpayers do not need to worry about this requirement, as their regime choice is handled directly through the ITR filing.
Q11. What is the deadline for changing a tax regime for AY 2025–26?
For AY 2025–26, the deadline to choose or change a tax regime is the due date for filing the return under Section 139(1), which is September 15, 2025. Salaried taxpayers can change their regime by filing a revised return before this date if needed. Business and professional taxpayers must also submit Form 10-IEA by this deadline if they wish to switch to the old regime. After this date, no further changes are possible.
Q12. How can TaxBuddy help in comparing old and new tax regimes before filing?
TaxBuddy provides an intelligent comparison tool that calculates tax liability under both the old and new regimes, highlighting which one results in lower taxes. Beyond automated calculations, TaxBuddy’s expert-assisted plans ensure professional review of each case, accounting for deductions, exemptions, and compliance requirements. This helps taxpayers avoid confusion and make a tax-efficient decision. By using the platform, taxpayers gain confidence that their chosen regime aligns with their financial goals and complies with tax laws.
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