#incometaxforms, #Incometaxrate,#Oldtaxregimevsnewtaxregime #Form10IE
What is Section 115BAC?
Section 115BAC is the newly inserted section in the Income Tax Act, 1961 that deals with the new income tax regime. This section and alternate tax regime was introduced in Union Budget 2020 and is applicable to individuals and Hindu Undivided Families (HUFs) only. A key feature of this new regime is that the income tax slab rates have been significantly reduced. However, the new rates come at the cost of various key income tax exemptions and deductions, which are currently available under the old (existing) income tax regime.
The Finance Act, 2020, has provided an option to Individuals and HUF for payment of taxes at the following reduced rates from Assessment Year 2021-22 and onwards:
Total Income (Rs) Rate
Up to 2,50,000 Nil
From 2,50,001 to 5,00,000 5%
From 5,00,001 to 7,50,000 10%
From 7,50,001 to 10,00,000 15%
From 10,00,001 to 12,50,000 20%
From 12,50,001 to 15,00,000 25%
Above 15,00,000 30%
Surcharge: Surcharge is levied on the amount of income-tax at following rates if total income of
an assessee exceeds specified limits:-
Assessment Year 2021-22
Range of Income
Rs. 50 Lakhs toRs. 1 Crore
Rs. 1 Crore to Rs. 2 Crores
Rs. 2 Crores to Rs. 5 Crores
Rs. 5 crores to Rs. 10 Crores
Exceeding Rs. 10 Crores
10% 15% 25% 37% 37%
Note: The enhanced surcharge of 25% & 37%, as the case may be, is not levied, from income
chargeable to tax under sections 111A, 112A and 115AD. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.
Conditions to be satisfied:
The option to pay tax at lower rates shall be available only if the total income of assessee
is computed without claiming following exemptions or deductions:
a) Leave Travel concession
b) House Rent Allowance
c) Official and personal allowances (other than those as may be prescribed)
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d) Allowances to MPs/MLAs
e) Allowances for income of minor
f) Deduction for units established in Special Economic Zones (SEZ) ;
g) Standard Deduction
h) Entertainment Allowance
i) Professional Tax
j) Interest on housing loan
k) Additional depreciation in respect of new plant and machinery ;
l) Deduction for investment in new plant and machinery in notified backward areas
;
m) Deduction in respect of tea, coffee or rubber business ;
n) Deduction in respect of business consisting of prospecting or extraction or
production of petroleum or natural gas in India ;
o) Deduction for donation made to approved scientific research association, university
college or other institutes for doing scientific research which may or may not be
related to business ;
p) Deduction for payment made to an Indian company for doing scientific research
which may or may not be related to business ;
q) Deduction for donation made to university, college, or other institution for doing
research in social science or statistical research ;
r) Deduction for donation made for or expenditure on scientific research
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;
s) Deduction in respect of capital expenditure incurred in respect of certain specified
businesses, i.e., cold chain facility, warehousing facility, etc. ;
t) Deduction for expenditure on agriculture extension project ;
u) Deduction for family Pension
v) Deduction in respect of certain incomes other than specified under Section 80JJAA,
80CCD(2) and deduction under section 80LA for Unit located in IFSC [Part C of
Chapter VI-A.
Old tax regime vs. new tax regime
The old (existing) tax regime allows for a variety of income tax deductions and exemptions, and hence is suitable for most of the taxpayers. However, the new tax regime may prove beneficial to those who have not significantly invested in various tax-saving schemes, such as Employee Provident Fund (EPF), Equity Linked Savings Scheme (ELSS), Life Insurance, National Pension Scheme (NPS), National Savings Certificate (NSC), tax-saving Fixed Deposit (FD), etc
CBDT notified a new form to be filled by those opting for the new tax regime for financial year 2020-21. This new form notified by CBDT on October 1 is Form 10-IE. Those opting for new tax retime from the financial year 2020-21 onwards, will need to submit an additional Form 10-IE while submitting their income tax returns.
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