Change of general information through rectification

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A salaried individual unintentionally selected the old tax regime in their ITR for AY 21-22/22-23 instead of the new one. They filed the return based on the old regime without filing a withdrawal form. Now, they are seeking to rectify this mistake through Section 154 to switch back to the new tax regime, as this would significantly reduce their tax liability. The individual clarifies that no income or deductions will be altered, only the regime selection.

abdul hakim

abdul hakim (Querist)

04 January 2024 Chosen new tax regime by filling the form 10IEA in ay 21-22 and filed, then ay 22-23 filed by choosing old regime ( by mistake and no withdrawal form filed).
Now, can I change the tax regime from old to new ( ie. By selecting 'yes' for the new regime in the ITR 4 under general information ) through rectification sec 154, by return data correction in response to notice sec 143?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

16 January 2024 Salaried Individual
A salaried individual can switch between the new and the old tax regime in every financial year. While the new tax regime will be the default tax regime in F.Y. 23-24, individuals can switch to the old regime depending on their income.

Individuals with Income from Business or Profession
Although individuals can switch between the old and new regimes, any individuals with an income from business or profession are not eligible to switch the regime more than once. For example, if an individual with a business income switches from the old to the new regime in F.Y. 2023, he/she won’t be eligible to switch again. Once an individual with a business income opts out of the new tax regime, they cannot opt-in again for the new tax regime in the future.

abdul hakim

abdul hakim (Querist)

19 January 2024 Sir

But , it was done unintentionally and no withdrawal form 10IE is filed . It happened by mistake chosen or mark as tick in the old regime box instead of New regime selection and tax calculation was done based on the old regime. I came to know upon the notice served by the authority.

As such we are not going to change any income or deduction as mentioned in our original ITR . through rectification mode, we can correct it. Once the correction is done my tax will be reduced significantly.

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