Mastering Form 10-IE and the New Tax Regime: Legal Validity, CPC Challenges & 2025 Compliance Roadmap

Procedure is the handmaid of justice, not its mistress."
— Supreme Court of India

The transition to the New Tax Regime under Section 115BAC sparked considerable compliance challenges, especially around the timely filing of Form 10-IE. While the law mandates procedural adherence, recent judicial pronouncements reveal a growing inclination to protect substantive rights over technical defaults — as long as the taxpayer’s intent is evident and no misreporting is involved.

This article clarifies whether filing Form 10-IE (or 10-IEA from AY 2024–25) is truly mandatory or directory, and provides a consolidated 2025 Compliance Calendar covering critical forms like 10-IE, 10-IEA, 10-IC, 10B, and 67 — which are vital for availing key tax benefits and avoiding CPC-led disallowances.

Section 115BAC: The Choice Between Two Regimes

Section 115BAC of the Income Tax Act allows Individuals and HUFs to opt for:

Regime	Features
Old Tax Regime	Higher tax rates with benefits like deductions under Chapter VI-A, HRA, LTA, etc.
New Tax Regime	Lower tax rates without most exemptions and deductions.

For those having income from business or profession, the option under the New Regime has to be exercised before the due date of filing ITR, via Form 10-IE (up to AY 2023–24) or Form 10-IEA (from AY 2024–25).

Judicial Insight: Directory or Mandatory?

Key Verdict: ITAT Ahmedabad – Arun Gopilal Samnani [TS-479-ITAT-2025(Ahd)]

The assessee was denied the benefit of the new regime due to non-filing of Form 10-IE within due time, even though he had opted for it earlier. The ITAT ruled:

• Form 10-IE is directory, not mandatory, if all substantive conditions of Section 115BAC(2) are met.

• Non-filing does not disqualify the assessee, provided no other ineligibility under 115BAC exists.

Other Supporting Rulings:

Case	Tribunal	Key Holding
Akshay Devendra Birari v. DCIT, CPC [2024] 164 taxmann.com 58	Pune ITAT	Filing of Form 10-IE is directory. CPC wrongly denied benefit despite form being submitted prior to assessment.
Harbans Singh v. AO, CPC [2024] 165 taxmann.com 146	Amritsar ITAT	Technical default in Form 10-IE filing does not override valid claim under new regime if filed before assessment.

 Where intention is documented and conditions under Section 115BAC(2) are fulfilled, delay in Form 10-IE should not result in denial. However, system-based CPC processing may not accept it without litigation.

Ultimate 2025 Compliance Calendar (Forms Relevant to Concessional Regimes & Tax Benefits)

Form	Purpose	Applicable To	Due Date	Consequences of Non-Filing
Form 10-IE	Opt-in to New Regime under Section 115BAC (up to AY 2023–24)	Individuals/HUFs with business/professional income	Due date u/s 139(1)	CPC will deny new regime; litigation may be required to restore benefit.
Form 10-IEA	New form from AY 2024–25 onwards for opting out/in under 115BAC(6)	All Individuals/HUFs	Along with ITR filing	Mandatory if no business income and opting in each year.
Form 10-IC	Opt-in for concessional corporate tax (22%) under Section 115BAA	Domestic Companies	On or before ITR due date u/s 139(1)	No benefit under 115BAA; taxed at normal corporate rates.
Form 10B	Audit report for Charitable Trusts (u/s 12A)	Trusts registered u/s 12AB	1 month before ITR due date	Loss of exemption u/s 11 and 12; risk of taxability.
Form 67	Claim Foreign Tax Credit (FTC) under Sections 90/91	Resident taxpayers with foreign income	Before ITR filing u/s 139(1)	FTC will be denied if not filed in time, unless condoned by judicial relief.

Note: ITR due date for non-audit cases is 31st July 2025 for AY 2025–26.

Substance Over Form: Policy vs. Practice

While the judiciary favors substance, CPC's automated system is not equipped for discretionary relief. Thus:

• Compliance with procedural deadlines is crucial to avoid adjustment under Section 143(1).

• Relief via ITAT or High Courts is time-consuming and case-specific.

• Even if forms are “directory” in law, they’re mandatory in practice due to system limitations.

Best Practices for Taxpayers & Advisors

Best Practice	Reason
File Form 10-IE/10-IEA/10-IC before due dates	Avoid automated denial by CPC
Maintain form acknowledgements	Evidence for tribunal or appellate relief
Track due dates via calendar/reminder apps	Simplifies recurring compliance
Review ITR processing for 143(1) adjustments	To file rectification in time, if needed

Tax benefits under the new regime or foreign tax credit are available only to diligent and timely filers. Judicial pronouncements have extended relief by declaring certain procedural forms as directory, but until systemic changes catch up, compliance is your best protection.

"अनुष्ठानं परं धर्मः" – Discipline is the highest virtue. In taxation, discipline in procedure protects substantive rights.