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Can I Change Tax Regime While Filing ITR? Check Comparison Of New Regime Vs Old Regime
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Salaried individuals can switch tax regimes annually when filing ITR; business owners can switch once; the new regime offers lower rates but fewer deductions.
ITR Filing 2025: As the ITR filing 2025 season is going on with a total of 12,33,162 income tax returns already filed, salaried individuals are awaiting their Form 16 from employer to file ITR this year. There is a common question among taxpayers: Can I change my tax regime while filing my ITR? Experts said the answer depends on your source of income and how you plan your taxes for the financial year.
Introduced in FY 2020-21 under Section 115BAC, the new tax regime offers lower tax rates but removes most deductions and exemptions such as HRA, standard deduction, 80C, etc.
The old regime, on the other hand, continues to allow taxpayers to claim various deductions and exemptions, but with comparatively higher slab rates.
Here's a comparison for FY25 or AY26:
New Tax Regime (Default for AY 2025-26)
Old Tax Regime
Can You Switch Tax Regimes While Filing ITR?
Yes, salaried individuals and pensioners can choose either regime at the time of filing their income tax return (ITR) every year.
'If you didn't inform your employer during the year or now wish to change your tax regime, you can do so at the time of filing your return," said an income tax practitioner.
However, for those with business or professional income, the flexibility is limited, he added.
Who Can Switch Annually?
Salaried individuals and pensioners: They individuals can switch between old and new tax regimes every year.
Self-employed or business owners: They can opt in or out only once. After opting out of the new regime once, they cannot choose it again in future years (unless business income ceases).
This is governed by Section 115BAC of the Income Tax Act, 1961.
Is the Tax Regime Option Locked Once Selected?
Salaried individuals: No, it's not locked. You can change your choice every assessment year.
Business/profession income taxpayers: Yes, once you switch back to the old regime, you cannot opt for the new regime again unless you stop having business income.
How to Change Tax Regime While Filing ITR?
You can choose your preferred tax regime directly while filing your ITR online. Here's how:
Steps to change tax regime on the Income Tax Portal:
Note: From AY 2024-25 onwards, the new tax regime is the default. You need to opt out if you want to stick with the old regime.
FAQs
1. Can I switch back to the old regime after opting for the new one?
Salaried individuals: Yes, every year.
Business income: You can switch only once. After opting out of the new regime, you cannot opt in again unless your business/professional income ceases.
2. What happens if I forget to choose the regime while filing ITR?
If you don't make a choice:
3. Is Form 10IEA required?
Yes, for AY 2024-25 onwards, Form 10IEA is mandatory for opting in or out of the new regime in some cases — especially for those with business income.
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Salaried individuals usually do not need to file it unless explicitly asked based on portal prompts.
So, you can change your tax regime while filing ITR, but only salaried individuals have the freedom to switch every year. Business owners or professionals can make the change only once. Be mindful of the tax-saving opportunities each regime offers and make your choice wisely based on actual calculations.
About the Author
Mohammad Haris
Haris is Deputy News Editor (Business) at He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously More
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tags :
income tax income tax return
Location :
New Delhi, India, India
First Published:
June 11, 2025, 12:16 IST
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