With the income tax return (ITR) filing deadline now extended to September 15, 2025, many taxpayers might consider taking a second look at whether the old or new tax regime works better for them this year. But before making a switch, especially at the last minute, it is important to know how the rules work, and what you could end up losing if you take a wrong step.
You can switch between tax regimes at the time of filing your ITR, but it depends on the following factors:
If you are a salaried individual or a pensioner with no business income, you can freely switch between the old and the new tax regime every year while filing your return. The process is simple, just select the relevant option in your ITR-1 or ITR-2 form.
However, if you have business or professional income, the rules are much tighter. You can switch back to the old regime only once in your lifetime. After that, the choice is locked. And you will need to submit Form 10-IEA before the filing deadline to make that switch count. Miss that, and you will be stuck with the new tax regime, which is also the default regime.
Why is it Different This Year
A lot of taxpayers would have already submitted their investment declarations in April 2024, before the full Union Budget was presented in July. That budget made the new regime more attractive by widening tax slabs and increasing the standard deduction.
So, if your salary deductions were based on the old regime, but you now realise that you would save more under the new one, you can still switch at the time of filing your return, and even claim a refund if excess tax was deducted. However, you must file your ITR before the due date.
On the flip side, if you are someone who claimed home loan interest (Section 24), HRA, or large deductions under Section 80C/80D, the old regime may still work out better, but only if you switch in time
The Default Regime
From financial year 2023-24, the new tax regime has been made the default one. This means unless you actively choose to opt out, your tax will automatically be calculated under the new regime. The ITR form will default to “No” when you ask whether you want to opt out of the new tax regime.
If you are planning to go back to the old regime, click “Yes” while filing your ITR. Otherwise, you will be assessed under the new regime, even if you had deductions lined up.
For those using ITR-3, ITR-4, or ITR-5, it is not just a matter of a checkbox. You must submit Form 10-IEA to declare your intention to go back to the old regime. And this form must be filed on or before September 15, 2025 (which is now the extended deadline for tax filing this year).
Form Confusion? Here’s What to Know
Many taxpayers are unsure whether to file Form 10-IE or 10-IEA. Here is the distinction between these two:
Form 10-IE was used to opt into the new regime, but this is no longer required since the new regime is now the default.
Form 10-IEA is the relevant form now and it is used by taxpayers with business income who want to switch back to the old regime. This form is mandatory in such cases for ongoing assessment year 2025-26.
Late Filing Comes at a Cost
If you are opting for the old tax regime, filing your return after the September 15 deadline could cost you more than just a late fee. You may lose the option to choose the old regime altogether.
This is because the Income-tax Act, 1961 does not allow regime changes in belated returns. So even if you are willing to pay the penalty to file late, you will be stuck with the new regime by default. As the Income Tax Department manual puts it: a delayed return means “deductions and exemptions not being available.”
The Bottom Line
As a taxpayer, you should compare your tax outgo under both regimes. If the old regime works out better, especially if you are claiming house rent allowance (HRA) or big-ticket deductions, make sure you tick the right box (or file the right form) before September 15. Once that window closes, there is no going back to change the tax regime, at least for this year.
