India: Amendments to new default tax regime

CBDT issued a notification amending new default tax regime and introduced a new Form 10-IEA

CBDT issued a notification amending new default tax regime, introduced a new Form 10-IEA

The Central Board of Direct Taxes (CBDT) issued a notification amending the new default tax regime and introduced a new Form 10-IEA to be filed by taxpayers with business income opting for or withdrawing from the old tax regime.


Finance Act, 2023, introduced a new default tax regime effective from tax year 2023-2024 for specified persons like individuals, Hindu undivided families, associations of persons (other than cooperative societies), bodies of individuals (incorporated or unincorporated), and artificial juridical persons, under which income tax is computed at the prescribed rates without considering prescribed exemptions/ deductions. Taxpayers may still elect, however, to be taxed under the old tax regime.

The amendments to the new default regime provided under the notification include:

  • Amendment to Rule 2BB: A taxpayer may claim exemptions such as allowance granted to meet cost of travel on tour or transfer, to meet ordinary daily charges on living on account of absence from normal place of duty, and conveyance allowance in performance of duties and transport allowance granted to employees with disability.
  • Amendment to Rule 3: A taxpayer may not claim exemption on free food and non-alcoholic beverage provided by the employer through paid voucher.
  • Amendment to Rule 5: Depreciation allowance is restricted to 40% for any block of assets in case of specified taxpayers who have opted for the concessional tax regime or the new default tax regime.

Read a June 2023 report [PDF 378 KB] prepared by the KPMG member firm in India


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