Old vs. New Tax Regime: What You Need to Know Before Filing for AY 2025-26

Old vs. New Tax Regime: What You Need to Know Before Filing for AY 2025-26

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Switching from the new tax regime to the old one for the Assessment Year (AY) 2025-26 is a common question, and the process depends entirely on what kind of income you have. The default tax regime is the new one, so you must actively choose to switch if you want to file under the old regime.

The filing deadline for most individuals and Hindu Undivided Families (HUFs) for AY 2025-26 has been extended to September 15, 2025.

If You Don’t Have Business or Professional Income

This applies to you if you file ITR-1 (Sahaj) or ITR-2. The process is simple and can be done directly on the Income Tax e-filing portal while you’re filling out your return.

  • You’ll see a question asking if you want to opt out of the new tax regime.
  • The default answer is “No.” To switch to the old regime, simply select “Yes.”
  • Once you do this, the portal will calculate your tax based on the old regime, and you’ll be able to claim your usual deductions and exemptions (like those under Section 80C, 80D, etc.).

Important: For ITR-1 and ITR-2 filers, this choice is not permanent. You can switch between the old and new tax regimes every year.

If You Have Business or Professional Income

This applies to you if you file ITR-3 or ITR-4 (Sugam). The process is more formal and has a key limitation.

  1. File Form 10-IEA: You must file a separate form, Form 10-IEA, to officially opt out of the new tax regime. This has to be done before or on the same day you file your ITR.
  2. It’s a One-Time Switch: This is the most important point. Once you use Form 10-IEA to switch to the old regime, you cannot switch back and forth in future years. If you later decide to re-enter the new regime, you will be permanently locked into it and cannot switch back to the old one again.
  3. Meet the Deadline: Form 10-IEA must be submitted by the ITR filing deadline, which is September 15, 2025, for non-audit cases.

How to File Form 10-IEA

  1. Log in to the Income Tax e-filing portal.
  2. Go to the “e-File” section and select “Income Tax Forms.”
  3. Choose “Form 10-IEA.”
  4. Fill in the necessary details and select the option to “Opt out” of the new tax regime.
  5. Submit and e-verify the form.

Once Form 10-IEA is successfully filed, you can proceed with filing your ITR-3 or ITR-4. Your return will now reflect the old tax regime’s calculations.

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