No Requirement To File Form 10-IE For Persons Not Having Business/Profession Income
Section 115BAC- NEW TAX REGIME (applicable from AY 21-22)
As all of you are aware, the Budget 2020 introduced a new tax regime under section 115BAC to Individuals and HUF to pay income tax at lower slab rates when compared to normal slab rates (with certain terms & conditions which is precisely non-allowability of various deductions and exemptions). Section 115BAC states that a person opting to pay tax under the new regime has to furnish Form 10-IE to the Income Tax department before filing the Income Tax Return for the relevant Assessment Year.
Let us understand from the provisions of Section 115BAC the requirement of filing Form 10-IE.
The sub-section (5) of Section 115BAC of the Income Tax Act reads as under:
(5) Nothing contained in this section shall apply unless option is exercised in the prescribed manner* by the person,—
(i) having income from business or profession, on or before the due date specified under sub-section (1) of section 139 for furnishing the returns of income for any previous year relevant to the assessment year commencing on or after the 1st day of April, 2021, and such option once exercised shall apply to subsequent assessment years;
(ii) having income other than the income referred to in clause (i), along with the return of income to be furnished under sub-section (1) of section 139 for a previous year relevant to the assessment year.
*– Rule 21AG of the Income Tax Rules specifies the manner in which the option to opt payment of tax under new regime can be exercised/withdrawn under Section 115BAC of the Income Tax Act.
What is FORM 10-IE?
No Requirement To File Form 10-Ie For Persons Not Having Business/Profession Income
Let us read the above mentioned point with clause(i) of sub-section (5) of 115BAC of the Act:
“Therefore, this means Form 10-IE is to be filed for exercising option to pay tax under new regime ONLY by persons having income from business/profession on or before the due date of filing income tax return specified u/s 139(1) for any previous year (beginning from AY 21-22) and such option exercised shall apply to all subsequent assessment years.”
Therefore, a person not having income from business/profession opting to pay tax under new tax regime can directly exercise option under section 115BAC in the Income Tax return ITR 1 or ITR 2 and is not required to file Form 10IE, and this is duly updated in FORM 10-IE in new income tax portal. The functionality is automatically enabled which means the assessee who is having business income only will be able to File FORM -10IE.