filing ITR

Introduction

"Can I switch my tax regime while filing ITR?"

Yes, you can change your tax regime while filing your Income Tax Return (ITR).

Since the Budget 2020, individual taxpayers and Hindu Undivided Families (HUFs) can choose between two tax regimes:

The old regime, which offers various deductions and exemptions, and
The new regime, which has lower tax rates but fewer deductions.

This flexibility often raises a common question: Can you change your tax regime while filing your ITR? And how often can you do it?

If you’re a salaried individual without business income, you can switch between the old and new regimes every year when you file your ITR.
However, if you have business or professional income, you can switch tax regimes only once. After that, switching back to the old regime is not allowed unless certain conditions are met.

Can I Change My Tax Regime While Filing ITR?

Yes, you can change your tax regime while filing your Income Tax Return (ITR).
Income tax rules allow taxpayers to choose either the old or new tax regime at the time of filing their ITR. For example, if you selected the old regime for TDS on your salary during the financial year 2024–25, you can still switch to the new regime when filing your return—and vice versa.

New Regime Is Now the Default

Starting from Assessment Year 2024–25 (for income earned in FY 2023–24), the new tax regime is the default option.
If you don’t actively choose between the two regimes while filing your ITR, your taxes will automatically be calculated under the new regime.
However, you can still opt out of the new regime and choose the old one—as long as you do so before the ITR filing deadline for the relevant assessment year.

Switching Rules: Salaried vs. Business Income

Salaried individuals (without business or professional income) can switch between the old and new regimes every year when filing their ITR.
Taxpayers with business or professional income can switch regimes only once. Once they switch, they are required to continue with that regime in future years, unless they discontinue the business

Old vs. New Tax Regime: What’s the Difference?

Before we look at how to switch tax regimes while filing your ITR, it’s important to understand how the Old Tax Regime and New Tax Regime differ.

What Is the Old Tax Regime?

The Old Tax Regime is the traditional tax system that existed before the 2020 Budget introduced changes. It offers a range of deductions, exemptions, and allowances that help reduce your taxable income. This regime is ideal for those who actively invest or spend in tax-saving categories.

Some common benefits available under the old regime include:

Section 80C: Investments in PPF, ELSS, LIC, etc.
Section 80D: Health insurance premiums
HRA: House Rent Allowance
Home loan interest and more

Old Regime – Tax Slabs (FY 2024–25)

Income Range (₹)	Tax Rate
Up to ₹2,50,000	Nil
₹2,50,001 – ₹5,00,000	5%
₹5,00,001 – ₹10,00,000	20%
Above ₹10,00,000	30%

What Is the New Tax Regime?

Introduced in Budget 2020, the New Tax Regime offers lower tax rates but removes most deductions and exemptions. Its purpose is to simplify the tax process and reduce the paperwork involved in claiming deductions.

However, a few benefits are still allowed under this regime, such as:

Section 80CCD(2): Employer’s contribution to NPS
Section 80JJAA: Additional deduction for new employment (for business income)

This regime is suited for those who prefer straightforward tax filing without investing heavily in tax-saving instruments.

New Regime – Tax Slabs (FY 2024–25 / AY 2025–26)

Income Range (₹)	Tax Rate
Up to ₹3,00,000	Nil
₹3,00,001 – ₹6,00,000	5%
₹6,00,001 – ₹9,00,000	10%
₹9,00,001 – ₹12,00,000	15%
₹12,00,001 – ₹15,00,000	20%
Above ₹15,00,000	30%

Note: Under the new regime, Section 87A rebate is available for total income up to ₹7 lakh, making such income effectively tax-free.

Not Sure Which One to Choose?

Choosing the right regime depends on your income, investments, and eligibility for deductions.
Need help deciding? Explore our full guide: Old vs. New Tax Regime – Which Is Better for You?

How to Change Your Tax Regime While Filing Your ITR

Switching between the old and new tax regimes while filing your Income Tax Return (ITR) is straightforward and can be done directly in the ITR form.
For Salaried Individuals
If you’re filing ITR-1 or ITR-2, you’ll see the following question:
“Do you wish to exercise the option under section 115BAC(6) of opting out of the new tax regime (default is ‘No’)?”
- Select ‘No’ to stay in the new tax regime (default).
- Select ‘Yes’ to switch to the old tax regime.
Important: If you want to opt for the old regime, make sure you select this option before the ITR filing deadline (typically July 31st). After the deadline, the new regime will apply automatically by default.
For Individuals with Business or Professional Income
If you earn income from business or profession (including income from trading in derivatives or options), the process is slightly different:
- You must file ITR-3 or ITR-4, and
- Submit Form 10-IEA before the ITR due date (July 31, 2025) under Section 139(1).
This form officially declares your intention to opt out of the new tax regime.
Note: You can switch back to the new regime only once after choosing the old regime. After that, you won’t be allowed to return to the old regime again.
Need Help Choosing the Right Regime?
Not sure whether the old or new regime suits you best?
Let tax experts (like those at IndiaFilings) guide you based on your income, deductions, and investment profile—so you can maximize your tax savings.

How Often Can I Switch Between the Two Tax Regimes?

I. Taxpayers with Business Income
- Limited Switching: If you have business or professional income, your ability to switch between the two tax regimes is more restricted.
- One-Time Option: After you opt out of the new tax regime, you can only switch back to it once during your lifetime.
- No Reverting: Once you switch to the new tax regime, you cannot return to the old regime in future years.
II. Taxpayers with Non-Business Income
- Annual Flexibility: For individuals without business or professional income, you can switch between the old and new tax regimes every year. This flexibility allows you to choose the tax regime that best suits your financial situation each year

Switching Tax Regimes: What Salaried Taxpayers Need to Know

Salaried taxpayers with non-business income have the flexibility to change their tax regime every year. Even if your employer deducted TDS based on the new tax regime, you can still opt for the old tax regime when filing your ITR.
Important Notes:
- Declare Your Choice Every Year: You must inform your employer of your tax regime choice at the start of each financial year. If you want TDS deducted under the old regime, you must specify this early.
- Default Regime: If you don’t declare your choice, your employer will automatically apply the new tax regime, as it’s the default.
- Switching Deadline: You must choose your preferred regime by the ITR filing due date (typically July 31st). After this date, the new tax regime will be applied automatically.
Switching to the Old Regime:
- If your employer deducted taxes based on the new tax regime, but you decide to switch to the old regime, you can make this change while filing your ITR.
- If taxes were over-deducted under the new regime, you can claim a refund for the excess amount.
Switching to the New Regime:
- If you initially opted for the old tax regime but later realize the new tax regime is more beneficial, you can switch to the new regime while filing your ITR.
- Similarly, if your employer deducted more taxes under the old regime, you can claim a refund for the excess amount

Tax Regime Switching Rules for Business and Professional Income

For individuals earning business or professional income, switching between tax regimes is more limited. Once you opt for the new tax regime, you have only one opportunity to switch back to the old regime. After that, switching back to the old regime is not allowed.

Tip: As per Budget 2023, the new tax regime is the default option. If you want to opt for the old regime, you must follow the process and file Form 10-IEA.

Procedure to File Form 10-IEA for Business Income Taxpayers

If you have business income and wish to opt for the old tax regime, here’s how to file Form 10-IEA before the ITR due date (July 31, 2025):
1. Log in to the Income Tax e-filing portal using your credentials.
2. Go to ‘e-File’ > ‘Income Tax Forms’ > ‘File Income Tax Forms’.
3. Find Form 10-IEA and click ‘File Now’.
4. Select the correct Assessment Year (e.g., FY 2023–24, AY 2024–25).
5. Follow the on-screen steps to:
  - Confirm you have business/professional income.
  - Choose the filing due date.
  - Select the tax regime.
  - Provide basic and additional information.
6. E-verify the form using Aadhaar OTP, EVC, or DSC.
7. After submission, you’ll receive a Transaction ID and Acknowledgment Number for future reference.

Things to Consider Before Switching Tax Regimes

Switching between the old and new tax regimes is an important decision that can impact your overall tax savings. Here are key points to consider:

Understand the Basics: The old regime offers deductions and exemptions, while the new regime offers lower tax rates with fewer benefits. Consider what you’re gaining or giving up with each regime.
Compare Tax Liability: Use a tax calculator to estimate your taxes under both regimes. Compare all your income sources, exemptions, and deductions to determine which regime saves you the most.
Impact on Your Investments: If you’re investing in tax-saving instruments like PPF, ELSS, or LIC premiums, switching to the new regime might reduce the tax benefits you receive.
Think Long-Term: Consider any potential future changes in income, life events (e.g., marriage, buying a home, children’s education), and how these might impact your choice of tax regime.
Prepare Your Documents: Keep all necessary documents (Form 16, investment proofs, rent receipts, etc.) ready to support your claims in case of an audit
Need Help Deciding?
Still unsure about which tax regime to choose? IndiaFilings tax experts can help you analyze your finances, calculate taxes, and file your ITR efficiently—maximizing your savings. Get expert help today and make the most of your tax planning!

About the Author

Muskan
Muskan is an expert writer with a talent for simplifying complex legal concepts into straightforward, practical advice. Through her articles, she helps entrepreneurs gain a deeper understanding of business laws, equipping them with the knowledge needed to successfully start and manage their ventures.

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