Old revenue tax regime vs new regime: Filing of return after due date

One of my colleague opted for brand spanking new tax regime for Assessment 12 months 21-22 and paid tax accordingly. He forgot to file his ITR earlier than due date. While submitting his ITR after due date he chosen the choice of belated due date the choice to pick out the brand new tax regime was not accepted by the system so he filed his ITR with late charge beneath outdated tax regime however didn’t pay the tax as proven beneath the outdated regime. He was pondering to file a revised return beneath new tax regime. Meanwhile revenue tax division has issued a requirement discover u/s 156 to pay the tax. When I consulted my CA he mentioned that he has to file his ITR beneath outdated tax regime solely after due date and possibility of latest tax regime isn’t accessible. My query is penalty is for submitting after due date and never beneath outdated or new tax regime. 

The price range of 2020 launched a brand new tax regime for Individuals and HUFs providing decrease tax charge slabs for individuals who are keen to forgo varied deductions and exemptions accessible. A taxpayer with enterprise revenue and having opted for brand spanking new tax regime can come again to outdated tax regime solely as soon as and thereafter he isn’t eligible for the brand new tax regime in future. However, an individual with non-business revenue can train the selection yearly. 

The choice to go for new tax regime or stay in new tax regime needs to be exercised by submitting kind no. 10 IE after finish of the monetary 12 months. I perceive that your colleague exercised the choice along with his employer for the restricted function of deduction of tax at supply from his wage as there isn’t any different provision beneath the legislation to train this feature earlier than finish of the related monetary 12 months. 

In case the assessee has enterprise revenue the choice needs to be exercised earlier than the due date of submitting of the ITR although the ITR could also be filed later however in case the assessee doesn’t have any enterprise revenue the choice needs to be exercised whereas submitting the return and the ITR too needs to be filed by the due date and never past that.

Since your colleague forgot to file the ITR by the due date and I presume that he didn’t have enterprise revenue he can’t train the choice of the brand new tax regime now and thus there isn’t any profit to file a revised ITR now as the choice of latest tax regime isn’t accessible for the evaluation 12 months 2021-2022 after the due date for submitting the ITR is over. 

Balwant Jain is a tax and funding skilled and might be reached on jainbalwant@gmail.com and @jainbalwant on Twitter.

Subscribe to Mint Newsletters

* Enter a legitimate e-mail

* Thank you for subscribing to our publication.

Never miss a narrative! Stay related and knowledgeable with Mint.
Download
our App Now!!