diff --git a/app/javascript/dashboard/components-next/Contacts/ContactsForm/ComposeConversation.vue b/app/javascript/dashboard/components-next/Contacts/ContactsForm/ComposeConversation.vue
deleted file mode 100644
index 412e296a6..000000000
--- a/app/javascript/dashboard/components-next/Contacts/ContactsForm/ComposeConversation.vue
+++ /dev/null
@@ -1,67 +0,0 @@
-<script setup>
-import { ref, computed, onMounted } from 'vue';
-import { useI18n } from 'vue-i18n';
-import { useRoute } from 'vue-router';
-import { useAlert } from 'dashboard/composables';
-import { debounce } from '@chatwoot/utils';
-import { searchContacts } from 'dashboard/components-next/NewConversation/helpers/composeConversationHelper.js';
-
-import ComposeNewConversation from 'dashboard/components-next/NewConversation/ComposeNewConversation.vue';
-
-const route = useRoute();
-const { t } = useI18n();
-
-const contacts = ref([]);
-const isSearching = ref(false);
-const showComposeNewConversation = ref(false);
-
-const contactId = computed(() => route.params.contactId || null);
-
-const onContactSearch = debounce(
-  async query => {
-    isSearching.value = true;
-    contacts.value = [];
-    try {
-      contacts.value = await searchContacts(query);
-      isSearching.value = false;
-    } catch (error) {
-      useAlert(t('COMPOSE_NEW_CONVERSATION.CONTACT_SEARCH.ERROR_MESSAGE'));
-    } finally {
-      isSearching.value = false;
-    }
-  },
-  300,
-  false
-);
-
-const toggle = () => {
-  showComposeNewConversation.value = !showComposeNewConversation.value;
-};
-
-const closeCompose = () => {
-  showComposeNewConversation.value = false;
-};
-
-onMounted(() => {
-  onContactSearch('');
-});
-</script>
-
-<template>
-  <div class="relative">
-    <slot
-      name="trigger"
-      :is-open="showComposeNewConversation"
-      :toggle="toggle"
-    />
-
-    <ComposeNewConversation
-      v-if="showComposeNewConversation"
-      :contacts="contacts"
-      :contact-id="contactId"
-      :is-loading="isSearching"
-      @search-contacts="onContactSearch"
-      @discard="closeCompose"
-    />
-  </div>
-</template>
diff --git a/app/javascript/dashboard/components-next/Contacts/ContactsLayout.vue b/app/javascript/dashboard/components-next/Contacts/ContactsLayout.vue
index f6f548933..1ffbf6e25 100644
--- a/app/javascript/dashboard/components-next/Contacts/ContactsLayout.vue
+++ b/app/javascript/dashboard/components-next/Contacts/ContactsLayout.vue
@@ -9,7 +9,7 @@ import Icon from 'dashboard/components-next/icon/Icon.vue';
 import PaginationFooter from 'dashboard/components-next/pagination/PaginationFooter.vue';
 import Breadcrumb from 'dashboard/components-next/breadcrumb/Breadcrumb.vue';
 import ContactActions from 'dashboard/components-next/Contacts/ContactHeader/ContactActions.vue';
-import ComposeConversation from 'dashboard/components-next/Contacts/ContactsForm/ComposeConversation.vue';
+import ComposeConversation from 'dashboard/components-next/NewConversation/ComposeConversation.vue';
 
 const props = defineProps({
   searchValue: {
diff --git a/app/javascript/dashboard/components-next/NewConversation/ComposeConversation.vue b/app/javascript/dashboard/components-next/NewConversation/ComposeConversation.vue
new file mode 100644
index 000000000..bb30a782b
--- /dev/null
+++ b/app/javascript/dashboard/components-next/NewConversation/ComposeConversation.vue
@@ -0,0 +1,143 @@
+<script setup>
+import { ref, computed, onMounted, watch } from 'vue';
+import { useMapGetter } from 'dashboard/composables/store';
+import { useI18n } from 'vue-i18n';
+import { useRoute } from 'vue-router';
+import { useAlert } from 'dashboard/composables';
+import { debounce } from '@chatwoot/utils';
+import {
+  searchContacts,
+  createNewContact,
+  fetchContactableInboxes,
+  processContactableInboxes,
+} from 'dashboard/components-next/NewConversation/helpers/composeConversationHelper.js';
+
+import ComposeNewConversationForm from 'dashboard/components-next/NewConversation/components/ComposeNewConversationForm.vue';
+
+const route = useRoute();
+const { t } = useI18n();
+
+const contacts = ref([]);
+const selectedContact = ref(null);
+const targetInbox = ref(null);
+
+const isCreatingContact = ref(false);
+const isFetchingInboxes = ref(false);
+
+const isSearching = ref(false);
+const showComposeNewConversation = ref(false);
+
+const contactById = useMapGetter('contacts/getContactById');
+const contactId = computed(() => route.params.contactId || null);
+const activeContact = computed(() => contactById.value(contactId.value));
+
+const onContactSearch = debounce(
+  async query => {
+    isSearching.value = true;
+    contacts.value = [];
+    try {
+      contacts.value = await searchContacts(query);
+      isSearching.value = false;
+    } catch (error) {
+      useAlert(t('COMPOSE_NEW_CONVERSATION.CONTACT_SEARCH.ERROR_MESSAGE'));
+    } finally {
+      isSearching.value = false;
+    }
+  },
+  300,
+  false
+);
+
+const handleSelectedContact = async ({ value, action, ...rest }) => {
+  try {
+    let contact;
+
+    if (action === 'create') {
+      isCreatingContact.value = true;
+      try {
+        contact = await createNewContact(value);
+        isCreatingContact.value = false;
+      } catch (error) {
+        isCreatingContact.value = false;
+        return;
+      }
+    } else {
+      contact = rest;
+    }
+    selectedContact.value = contact;
+
+    if (contact?.id) {
+      isFetchingInboxes.value = true;
+      const contactableInboxes = await fetchContactableInboxes(contact.id);
+      selectedContact.value.contactInboxes = contactableInboxes;
+      isFetchingInboxes.value = false;
+    }
+  } catch (error) {
+    isCreatingContact.value = false;
+  }
+};
+
+const handleTargetInbox = inbox => {
+  targetInbox.value = inbox;
+};
+
+const clearSelectedContact = () => {
+  selectedContact.value = null;
+  targetInbox.value = null;
+};
+
+const closeCompose = () => {
+  showComposeNewConversation.value = false;
+  selectedContact.value = null;
+  targetInbox.value = null;
+};
+
+const toggle = () => {
+  showComposeNewConversation.value = !showComposeNewConversation.value;
+};
+
+watch(
+  activeContact,
+  () => {
+    if (activeContact.value && contactId.value) {
+      // Add null check for contactInboxes
+      const contactInboxes = activeContact.value?.contactInboxes || [];
+      selectedContact.value = {
+        ...activeContact.value,
+        contactInboxes: processContactableInboxes(contactInboxes),
+      };
+    }
+  },
+  { immediate: true, deep: true }
+);
+
+onMounted(() => {
+  onContactSearch('');
+});
+</script>
+
+<template>
+  <div class="relative">
+    <slot
+      name="trigger"
+      :is-open="showComposeNewConversation"
+      :toggle="toggle"
+    />
+
+    <ComposeNewConversationForm
+      v-if="showComposeNewConversation"
+      :contacts="contacts"
+      :contact-id="contactId"
+      :is-loading="isSearching"
+      :selected-contact="selectedContact"
+      :target-inbox="targetInbox"
+      :is-creating-contact="isCreatingContact"
+      :is-fetching-inboxes="isFetchingInboxes"
+      @search-contacts="onContactSearch"
+      @update-selected-contact="handleSelectedContact"
+      @update-target-inbox="handleTargetInbox"
+      @clear-selected-contact="clearSelectedContact"
+      @discard="closeCompose"
+    />
+  </div>
+</template>
diff --git a/app/javascript/dashboard/components-next/NewConversation/ComposeNewConversation.vue b/app/javascript/dashboard/components-next/NewConversation/components/ComposeNewConversationForm.vue
similarity index 73%
rename from app/javascript/dashboard/components-next/NewConversation/ComposeNewConversation.vue
rename to app/javascript/dashboard/components-next/NewConversation/components/ComposeNewConversationForm.vue
index 552553f74..4f260fe2a 100644
--- a/app/javascript/dashboard/components-next/NewConversation/ComposeNewConversation.vue
+++ b/app/javascript/dashboard/components-next/NewConversation/components/ComposeNewConversationForm.vue
@@ -1,5 +1,5 @@
 <script setup>
-import { reactive, watch, ref, computed } from 'vue';
+import { reactive, ref, computed } from 'vue';
 import { useI18n } from 'vue-i18n';
 import { useStore, useMapGetter } from 'dashboard/composables/store';
 import { useAlert } from 'dashboard/composables';
@@ -13,19 +13,16 @@ import {
 } from 'dashboard/helper/editorHelper';
 import {
   buildContactableInboxesList,
-  createNewContact,
-  fetchContactableInboxes,
   prepareNewMessagePayload,
   prepareWhatsAppMessagePayload,
-  processContactableInboxes,
 } from 'dashboard/components-next/NewConversation/helpers/composeConversationHelper.js';
 
-import ContactSelector from './components/ContactSelector.vue';
-import InboxSelector from './components/InboxSelector.vue';
-import EmailOptions from './components/EmailOptions.vue';
-import MessageEditor from './components/MessageEditor.vue';
-import ActionButtons from './components/ActionButtons.vue';
-import InboxEmptyState from './components/InboxEmptyState.vue';
+import ContactSelector from './ContactSelector.vue';
+import InboxSelector from './InboxSelector.vue';
+import EmailOptions from './EmailOptions.vue';
+import MessageEditor from './MessageEditor.vue';
+import ActionButtons from './ActionButtons.vue';
+import InboxEmptyState from './InboxEmptyState.vue';
 
 const props = defineProps({
   contacts: {
@@ -36,13 +33,36 @@ const props = defineProps({
     type: String,
     default: null,
   },
+  selectedContact: {
+    type: Object,
+    default: null,
+  },
+  targetInbox: {
+    type: Object,
+    default: null,
+  },
+  isCreatingContact: {
+    type: Boolean,
+    default: false,
+  },
+  isFetchingInboxes: {
+    type: Boolean,
+    default: false,
+  },
   isLoading: {
     type: Boolean,
     default: false,
   },
 });
 
-const emit = defineEmits(['searchContacts', 'discard', 'success']);
+const emit = defineEmits([
+  'searchContacts',
+  'discard',
+  'success',
+  'updateSelectedContact',
+  'updateTargetInbox',
+  'clearSelectedContact',
+]);
 
 const store = useStore();
 const { t } = useI18n();
@@ -51,24 +71,17 @@ const showContactsDropdown = ref(false);
 const showInboxesDropdown = ref(false);
 const showCcEmailsDropdown = ref(false);
 const showBccEmailsDropdown = ref(false);
-const isCreatingContact = ref(false);
-const isFetchingInboxes = ref(false);
 
-const contactById = useMapGetter('contacts/getContactById');
 const contactsUiFlags = useMapGetter('contacts/getUIFlags');
 const currentUser = useMapGetter('getCurrentUser');
 const globalConfig = useMapGetter('globalConfig/get');
 const uiFlags = useMapGetter('contactConversations/getUIFlags');
-const activeContact = computed(() => contactById.value(props.contactId));
 const directUploadsEnabled = computed(
   () => globalConfig.value.directUploadsEnabled
 );
 
 const isCreating = computed(() => uiFlags.value.isCreating);
 
-const selectedContact = ref(null);
-const targetInbox = ref(null);
-
 const state = reactive({
   message: '',
   subject: '',
@@ -80,26 +93,26 @@ const state = reactive({
 const showBccInput = ref(false);
 
 const inboxTypes = computed(() => ({
-  isEmail: targetInbox.value?.channelType === INBOX_TYPES.EMAIL,
-  isTwilio: targetInbox.value?.channelType === INBOX_TYPES.TWILIO,
-  isWhatsapp: targetInbox.value?.channelType === INBOX_TYPES.WHATSAPP,
-  isWebWidget: targetInbox.value?.channelType === INBOX_TYPES.WEB,
-  isApi: targetInbox.value?.channelType === INBOX_TYPES.API,
+  isEmail: props.targetInbox?.channelType === INBOX_TYPES.EMAIL,
+  isTwilio: props.targetInbox?.channelType === INBOX_TYPES.TWILIO,
+  isWhatsapp: props.targetInbox?.channelType === INBOX_TYPES.WHATSAPP,
+  isWebWidget: props.targetInbox?.channelType === INBOX_TYPES.WEB,
+  isApi: props.targetInbox?.channelType === INBOX_TYPES.API,
   isEmailOrWebWidget:
-    targetInbox.value?.channelType === INBOX_TYPES.EMAIL ||
-    targetInbox.value?.channelType === INBOX_TYPES.WEB,
+    props.targetInbox?.channelType === INBOX_TYPES.EMAIL ||
+    props.targetInbox?.channelType === INBOX_TYPES.WEB,
   isTwilioSMS:
-    targetInbox.value?.channelType === INBOX_TYPES.TWILIO &&
-    targetInbox.value?.medium === 'sms',
+    props.targetInbox?.channelType === INBOX_TYPES.TWILIO &&
+    props.targetInbox?.medium === 'sms',
 }));
 
 const whatsappMessageTemplates = computed(() =>
-  Object.keys(targetInbox.value?.messageTemplates || {}).length
-    ? targetInbox.value.messageTemplates
+  Object.keys(props.targetInbox?.messageTemplates || {}).length
+    ? props.targetInbox.messageTemplates
     : []
 );
 
-const inboxChannelType = computed(() => targetInbox.value?.channelType || '');
+const inboxChannelType = computed(() => props.targetInbox?.channelType || '');
 
 const validationRules = computed(() => ({
   selectedContact: { required },
@@ -109,8 +122,8 @@ const validationRules = computed(() => ({
 }));
 
 const v$ = useVuelidate(validationRules, {
-  selectedContact,
-  targetInbox,
+  selectedContact: computed(() => props.selectedContact),
+  targetInbox: computed(() => props.targetInbox),
   message: computed(() => state.message),
   subject: computed(() => state.subject),
 });
@@ -126,8 +139,8 @@ const validationStates = computed(() => ({
 const newMessagePayload = () => {
   const { message, subject, ccEmails, bccEmails, attachedFiles } = state;
   return prepareNewMessagePayload({
-    targetInbox: targetInbox.value,
-    selectedContact: selectedContact.value,
+    targetInbox: props.targetInbox,
+    selectedContact: props.selectedContact,
     message,
     subject,
     ccEmails,
@@ -139,15 +152,15 @@ const newMessagePayload = () => {
 };
 
 const contactableInboxesList = computed(() => {
-  return buildContactableInboxesList(selectedContact.value?.contactInboxes);
+  return buildContactableInboxesList(props.selectedContact?.contactInboxes);
 });
 
 const showNoInboxAlert = computed(() => {
   return (
-    selectedContact.value &&
+    props.selectedContact &&
     contactableInboxesList.value.length === 0 &&
     !contactsUiFlags.value.isFetchingInboxes &&
-    !isFetchingInboxes.value
+    !props.isFetchingInboxes
   );
 });
 
@@ -180,56 +193,25 @@ const searchBccEmails = value => {
 };
 
 const setSelectedContact = async ({ value, action, ...rest }) => {
-  try {
-    v$.value.$reset();
-    let contact;
-
-    if (action === 'create') {
-      isCreatingContact.value = true;
-      try {
-        contact = await createNewContact(value);
-        isCreatingContact.value = false;
-      } catch (error) {
-        isCreatingContact.value = false;
-        return;
-      }
-    } else {
-      contact = rest;
-    }
-    selectedContact.value = contact;
-    showContactsDropdown.value = false;
-
-    // Only proceed with fetching inboxes if we have a contact
-    if (contact?.id) {
-      isFetchingInboxes.value = true;
-      const contactableInboxes = await fetchContactableInboxes(contact.id);
-      selectedContact.value.contactInboxes = contactableInboxes;
-      showInboxesDropdown.value = true;
-      isFetchingInboxes.value = false;
-    }
-  } catch (error) {
-    // Reset states in case of error
-    isCreatingContact.value = false;
-    showContactsDropdown.value = false;
-  }
+  v$.value.$reset();
+  emit('updateSelectedContact', { value, action, ...rest });
+  showContactsDropdown.value = false;
+  showInboxesDropdown.value = true;
 };
 
 const handleInboxAction = ({ value, action, ...rest }) => {
   v$.value.$reset();
-  targetInbox.value = {
-    ...rest,
-  };
+  emit('updateTargetInbox', { ...rest });
   showInboxesDropdown.value = false;
 };
 
 const removeTargetInbox = value => {
   v$.value.$reset();
-  targetInbox.value = value;
+  emit('updateTargetInbox', value);
 };
 
 const clearSelectedContact = () => {
-  selectedContact.value = null;
-  targetInbox.value = null;
+  emit('clearSelectedContact');
 };
 
 const onClickInsertEmoji = emoji => {
@@ -295,8 +277,8 @@ const handleSendMessage = async () => {
 
 const handleSendWhatsappMessage = async ({ message, templateParams }) => {
   const whatsappMessagePayload = prepareWhatsAppMessagePayload({
-    targetInbox: targetInbox.value,
-    selectedContact: selectedContact.value,
+    targetInbox: props.targetInbox,
+    selectedContact: props.selectedContact,
     message,
     templateParams,
     currentUser: currentUser.value,
@@ -307,21 +289,6 @@ const handleSendWhatsappMessage = async ({ message, templateParams }) => {
   });
   emit('discard');
 };
-
-watch(
-  activeContact,
-  () => {
-    if (activeContact.value && props.contactId) {
-      selectedContact.value = {
-        ...activeContact.value,
-        contactInboxes: processContactableInboxes(
-          activeContact.value?.contactInboxes
-        ),
-      };
-    }
-  },
-  { immediate: true, deep: true }
-);
 </script>
 
 <template>
diff --git a/app/javascript/dashboard/components-next/NewConversation/components/ContactSelector.vue b/app/javascript/dashboard/components-next/NewConversation/components/ContactSelector.vue
index e09741900..7d6bc9764 100644
--- a/app/javascript/dashboard/components-next/NewConversation/components/ContactSelector.vue
+++ b/app/javascript/dashboard/components-next/NewConversation/components/ContactSelector.vue
@@ -112,6 +112,7 @@ const selectedContactLabel = computed(() => {
         :show-dropdown="showContactsDropdown"
         :is-loading="isLoading"
         :disabled="contactableInboxesList?.length > 0 && showInboxesDropdown"
+        allow-create
         type="email"
         class="flex-1 min-h-7"
         :class="
diff --git a/app/javascript/dashboard/components-next/taginput/TagInput.vue b/app/javascript/dashboard/components-next/taginput/TagInput.vue
index 388b44541..b48823d94 100644
--- a/app/javascript/dashboard/components-next/taginput/TagInput.vue
+++ b/app/javascript/dashboard/components-next/taginput/TagInput.vue
@@ -26,6 +26,7 @@ const props = defineProps({
     validator: value => ['single', 'multiple'].includes(value),
   },
   focusOnMount: { type: Boolean, default: false },
+  allowCreate: { type: Boolean, default: false },
 });
 
 const emit = defineEmits([
@@ -99,6 +100,16 @@ const filteredMenuItems = computed(() => {
   return availableMenuItems;
 });
 
+const emitDataOnAdd = emailValue => {
+  const matchingMenuItem = props.menuItems.find(
+    item => item.email === emailValue
+  );
+
+  return matchingMenuItem
+    ? emit('add', { email: emailValue, ...matchingMenuItem })
+    : emit('add', { value: emailValue, action: 'create' });
+};
+
 const addTag = async () => {
   const trimmedTag = newTag.value.trim();
   if (!trimmedTag) return;
@@ -108,7 +119,10 @@ const addTag = async () => {
     return;
   }
 
-  if (props.type === 'email' && !(await v$.value.$validate())) return;
+  if (props.type === 'email' && props.allowCreate) {
+    if (!(await v$.value.$validate())) return;
+    emitDataOnAdd(trimmedTag);
+  }
 
   tags.value.push(trimmedTag);
   newTag.value = '';
@@ -123,23 +137,18 @@ const removeTag = index => {
 };
 
 const handleDropdownAction = async ({ email: emailAddress, ...rest }) => {
-  if (!emailAddress) {
-    emit('add', { email: emailAddress, ...rest });
-    return;
-  }
-
   if (props.mode === MODE.SINGLE && tags.value.length >= 1) return;
 
-  if (props.type === 'email') {
+  if (props.type === 'email' && props.showDropdown) {
     newTag.value = emailAddress;
     if (!(await v$.value.$validate())) return;
+    emit('add', { email: emailAddress, ...rest });
   }
 
   tags.value.push(emailAddress);
   newTag.value = '';
   emit('update:modelValue', tags.value);
   tagInputRef.value?.focus();
-  emit('add', { email: emailAddress, ...rest });
 };
 
 const handleFocus = () => {