Old income tax regime vs new regime: Filing of return after due date

  • March 21, 2022
  • CA Chandan Agarwal's Office
The option to opt for new tax regime or remain in new tax regime has to be exercised by filing form no. 10 IE after end of the financial year.

One of my colleague opted for new tax regime for Assessment year 21-22 and paid tax accordingly. He forgot to file his ITR before due date. While filing his ITR after due date he selected the option of belated due date the option to select the new tax regime was not accepted by the system so he filed his ITR with late fee under old tax regime but did not pay the tax as shown under the old regime. He was thinking to file a revised return under new tax regime. Meanwhile income tax department has issued a demand notice u/s 156 to pay the tax. When I consulted my CA he said that he has to file his ITR under old tax regime only after due date and option of new tax regime is not available. My question is penalty is for filing after due date and not under old or new tax regime. 

The budget of 2020 introduced a new tax regime for Individuals and HUFs offering lower tax rate slabs for those who are willing to forgo various deductions and exemptions available. A taxpayer with business income and having opted for new tax regime can come back to old tax regime only once and thereafter he is not eligible for the new tax regime in future. However, a person with non-business income can exercise the choice every year.

The option to opt for new tax regime or remain in new tax regime has to be exercised by filing form no. 10 IE after end of the financial year. I understand that your colleague exercised the option with his employer for the limited purpose of deduction of tax at source from his salary as there is no other provision under the law to exercise this option before end of the relevant financial year.

In case the assessee has business income the option has to be exercised before the due date of filing of the ITR though the ITR may be filed later but in case the assessee does not have any business income the option has to be exercised while filing the return and the ITR too has to be filed by the due date and not beyond that.

Since your colleague forgot to file the ITR by the due date and I presume that he did not have business income he cannot exercise the option of the new tax regime now and thus there is no benefit to file a revised ITR now as the option of new tax regime is not available for the assessment year 2021-2022 after the due date for filing the ITR is over.

Source: https://www.livemint.com/money/personal-finance/old-income-tax-regime-vs-new-regime-filing-of-return-after-due-date-11647664994182.html


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