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Quick Summary
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There is a new section called 115BAC inserted in Income Tax, 1961. This is going to effect from AY 2021-22. An assessee can opt old system or new as he wish. When an assessee opting for New he will lose some exemptions/deductions/carry forward loss etc. A summary of Section 115BAC is discussed below. |
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| Total Income | Rate of Tax | ||
| Upto Rs. 2,50,000 | Nil | ||
| From Rs. 2,50,001 to Rs. 5,00,000 | 5 per cent | ||
| From Rs. 5,00,001 to Rs. 7,50,000 | 10 per cent | ||
| From Rs. 7,50,001 to Rs. 10,00,000 | 15 per cent | ||
| From Rs. 10,00,001 to Rs. 12,50,000 | 20 per cent | ||
| From Rs. 12,50,001 to Rs. 15,00,000 | 25 per cent | ||
| Above Rs. 15,00,000 | 30 per cent | ||
Available only for Individuals and HUF |
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| A person Who are opting for 115BAC cannot claim following Exemptions/Deductions | |||
| Section | |||
| 10(5) | Leave travel concession | ||
| 10(13A) | House rent Allowance | ||
| 10(14) | Any other compensatory allowances | ||
| 10(17) | Daily Allowance of MPs and MLAs | ||
| 10(32) | Minors income not clubbed upto Rs.1500.00 | ||
| 10AA | Special provisions in respect of newly established Units in SEZ | ||
| 16 | Standard deduction for Salary | ||
| 24(b) | Interest on borrowed capital - Self Occupied House property only (interest on let out property can claim) | ||
| 32(1)(iia) | Additional Depreciation | ||
| 32AD | Investment in new plant or machinery in notified backward areas in certain States | ||
| 33AB | Tea development account, coffee development account and rubber development account | ||
| 33ABA | Site Restoration Fund | ||
| 35(1)(ii) | Amount paid to research association or to university for Research | ||
| 35(1)(iia) | Any sum paid to a company to be used by it for scientific research | ||
| 35(1)(iii) | Any sum paid to a research association which has as its object the undertaking of research in social science or statistical research | ||
| 35(2AA) | Any sum to a National Laboratory or a University or an IIT. | ||
| 35AD | Deduction in respect of expenditure on specified business. | ||
| 35CCC | Expenditure on the agricultural extension project | ||
| 57(iia) | Deduction for Family pension ( 1/3 rd or 15,000) | ||
Any Provision of Chapter VIA Other than |
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| 80CCD(2) | Employer's Contribution to pension Scheme of Central Government. | ||
| 80JJAA | Deduction in respect of employment of new employees | ||
| Without any Setoff of any Loss - | |||
| (a) | Carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to above Sections or clauses | ||
| (b) | Under the head "Income from house property" with any other head of income | ||
| No Credit for above-mentioned losses will be given in subsequent years. It shall be deemed to have been given full effect in CY | |||
| Can Claim depreciation under all provisions of section 32 except u/s 32(1)(iia) (Additional depreciation) | |||
| No exemption or deduction for allowances or perquisite available | |||
| A person having income from business or profession who opted for this can withdraw at any AY. But after withdrawal he can not opt again for this. | |||
| E & OE. | Sri Rajarajeswari | ||
FAQ :
Section 115BAC is a new section in the Income Tax Act, 1961, effective from AY 2021-22, which provides a new tax regime with reduced tax rates for individuals and HUFs.
The new tax regime under Section 115BAC is available for individuals and Hindu Undivided Families (HUFs).
The tax rates under Section 115BAC are Nil up to Rs. 2,50,000, 5% from Rs. 2,50,001 to Rs. 5,00,000, 10% from Rs. 5,00,001 to Rs. 7,50,000, 15% from Rs. 7,50,001 to Rs. 10,00,000, 20% from Rs. 10,00,001 to Rs. 12,50,000, 25% from Rs. 12,50,001 to Rs. 15,00,000, and 30% above Rs. 15,00,000.
When opting for Section 115BAC, taxpayers lose various deductions and exemptions, including Leave Travel Concession (LTC), House Rent Allowance (HRA), Standard Deduction for Salary, and deductions under Chapter VI-A (except for employer's contribution to NPS under 80CCD(2)).
No, if you opt for Section 115BAC, you cannot carry forward losses or depreciation from earlier assessment years if they are attributable to the deductions that are not allowed under this new regime. No credit for these losses will be given in subsequent years.
Yes, a person having income from business or profession can opt for Section 115BAC, but once they withdraw from it, they cannot opt for it again in any subsequent assessment year.
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