Yash Salampuria
Quick Summary
Everything has been changed in the beginning of new FY 2020-21 like the new virus, lockdown, work from home and also popped up new question i.e. Which scheme should an employee opt for Income Tax ? A new section 115BAC is inserted in the Income Tax Act. This section provides for a new option to i
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
View all CCI PRO benfits
Already a PRO member? Login here for an ad-free experience.
FAQ :
Employees can choose between the old tax regime and a new optional scheme introduced under Section 115BAC of the Income Tax Act.
The new scheme offers lower tax rates but eliminates most deductions and exemptions, while the old scheme has higher tax rates but allows for various deductions and exemptions to reduce taxable income.
For TDS deduction purposes, an employee cannot change their option once intimated to the employer. However, they can switch schemes when filing their income tax return.
The new tax scheme may be more beneficial for individuals with high incomes who make minimal tax-saving investments.
The old tax scheme may be better suited for low-to-middle income individuals who make sufficient investments in various tax-saving schemes.
If no intimation is made, the employer will deduct TDS assuming the employee has opted for the old scheme.
CAclubindia
