Default Tax Regime & How to Opt for the Old Regime (Form 10-IEA)
Last verified: June 2026, against the Income Tax Act and Budget 2025 provisions cited below. Figures apply to FY 2025-26 (AY 2026-27). General information, not personal tax advice.
Since FY 2023-24 the new tax regime is the default. If you do nothing, you are taxed under it. To use the old regime — with its 80C, HRA and other deductions — you must actively choose it, and for some taxpayers that means filing Form 10-IEA. Here is how regime selection works.
The default rule
Every individual is placed in the new regime by default. The old regime is now optional and must be selected for each year you want it.
Salaried / no business income
If you have no business or professional income, you can switch between regimes every year simply by selecting the old regime while filing your ITR (and indicating your choice to your employer for TDS during the year). There is full flexibility year to year.
Business or professional income — Form 10-IEA
If you have business or professional income and want the old regime, you must file Form 10-IEA before the ITR due date. Crucially, this group has limited flexibility: once you opt out to the old regime and later switch back to the new regime, you generally cannot return to the old regime again (one switch back, then locked in). Choose deliberately.
How to decide
The old regime wins only if your deductions (80C, 80D, HRA, home-loan interest, etc.) are large enough to beat the new regime’s lower rates and ₹12 lakh rebate. Most people with few deductions are better off on the new regime; heavy deduction-users should compare. Walk through it in old vs new tax regime and test figures in the income tax calculator.
Tell your employer too
Declare your intended regime to your employer at the start of the year so TDS is deducted correctly. You can still change the final choice when filing your ITR (if you have no business income).
FAQs
Which regime applies if I do not choose?
The new regime — it is the default.
Can salaried people switch every year?
Yes, if you have no business income you can choose afresh each year at filing.
What is Form 10-IEA?
The form business/professional-income taxpayers must file to opt for the old regime (or to opt back out).
Can business owners switch freely?
No. They have restricted flexibility — broadly one switch back to the new regime, after which the old regime is no longer available.
