Number of times I can change Tax Regime for ITR-3

[Shrey Shah]

Hi, I have a query in regards to the number of times I can change Tax Regime for ITR-3. (I have Presumptive Income - 44ADA and some short term capital gains)

 

So in:

- FY 23-24, I filed Form 10IEA to OPT OUT of New Regime.

- Then in FY 24-25, I continued with the Old Regime. (Opting out of New Regime). Since I continued with Old Regime, I didn’t have to file Form 10IEA again.

Now, my question is that:

1) In FY 26-27 (next year onwards), can I file Form 10IEA to re-enter New Tax Regime?

Thanks for the help :)

[Ryan Vaz]

Applicable Law / Notification / Circular

• Section 115BAC(1A) & (5) of the Income-tax Act, 1961

• Rule 21AG, Income-tax Rules, 1962 (Form 10-IEA procedure)

• CBDT Circular No. 4/2023 dated 5 April 2023 (clarification on default regime and opt-out rules)

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Short Practical Answer

Yes, you can re-enter the New Tax Regime in FY 2026-27 (AY 2027-28) by filing Form 10-IEA — provided you have opted out only once so far.
However, this will be your final switch. After re-entering the New Regime, you cannot opt out again in any future year as long as you have business/professional income (including presumptive income u/s 44ADA).

[Shrey Shah]

Thank you sir for the reply.

 

Yes, I just filed Form 10IEA in FY 22-23 once to opt out of New Regime. After that in FY 24-25 I continued opting out using the previously filed Form 10IEA as there were 2 options while filing the ITR (1. Did you opt out of New Regime in the last financial year? And 2. Do you wish to continue opt out for the current financial year) 
 

Now going forward, the New Tax Regime seems beneficial to me in the long run so I wish to re-enter the New Tax Regime.

AI Summary

Switching tax regimes for business/professional income: Form 10-IEA u/s 115BAC allows re-entry, later opt-out barred. Section 115BAC(1A) and (5) read with Rule 21AG (Form 10-IEA procedure), as clarified by CBDT Circular No. 4/2023, permits an individual having business or professional income (including presumptive income under section 44ADA) to deviate from the default tax regime by exercising a prescribed option through Form 10-IEA. Where the taxpayer has exercised the opt-out option only once and thereafter continued under the same regime without refiling, the taxpayer may subsequently re-enter the new tax regime by filing Form 10-IEA for the relevant year. Upon re-entering the new regime, the option to opt out again is barred for subsequent years so long as business or professional income continues.