ITR Filing 2025: Chose the Wrong Tax Regime? Here's When and How You Can Switch

While filing your Income Tax Return (ITR), many taxpayers often mistakenly select the wrong tax regime. Fortunately, depending on your source of income, the government still allows you to switch between the old and new tax regimes—but with certain restrictions.

Here’s a detailed breakdown of when and how you can switch your tax regime while filing ITR for Assessment Year 2025–26.

🧾 What's the Difference Between Old and New Tax Regime?

Old Tax Regime	New Tax Regime (Default)
Higher tax rates	Lower tax rates
Allows various deductions (80C, 80D, HRA, etc.)	Most deductions and exemptions not allowed
Best for those with high investments or exemptions	Suitable for taxpayers with minimal deductions

 

🔁 Who Can Switch Between Regimes?

1. ✅ Salaried Individuals (filing ITR-1 or ITR-2)

   • Can switch between the old and new regimes every year.

2. ⚠️ Business or Professional Taxpayers (filing ITR-3 or ITR-4)

   • Can switch to the old regime only once.

   • Once they opt back into the new regime, they cannot return to the old regime again.

🖥️ How to Switch Regime While Filing ITR?

For Salaried Taxpayers:

When filling ITR-1 or ITR-2, you’ll be asked:

“Do you want to opt out of the new tax regime under Section 115BAC(6)?”

• Select "Yes" → Opts for Old Regime

• Select "No" → Stays in New Regime (default)

💡 This selection directly impacts your tax calculation and slab rates.

For Business/Professional Taxpayers:

To switch tax regimes, Form 10-IEA must be filed before filing the ITR, and before September 15, 2025.

🔽 How to File Form 10-IEA:

1. Go to https://www.incometax.gov.in

2. Log in using your PAN credentials

3. Navigate to:
   e-File > Income Tax Forms > File Income Tax Forms

4. Search and click “Form 10-IEA” > File Now

5. Select Assessment Year: 2025–26

6. Choose your Income Type (Business/Salary) and regime switching intent

7. Submit using Aadhaar OTP / EVC / DSC

8. You’ll get a Verification Number and Transaction ID after submission

❗ What If You Don’t Choose a Regime?

If you don’t actively choose a regime, the system will default to the new tax regime, which may not be beneficial if you are eligible for higher deductions under the old regime.

📊 Expert Advice: Compare Before You File

• Use online tax calculators to compare your tax liability under both regimes

• Consult a tax advisor if you have multiple income sources or complex deductions

• Picking the right regime can help you maximize tax savings and avoid regrets post-filing