Section: 115BAC - Incentives in Tax rates to Individual and HUF (Proposed)

CA Nayan Goyal | Last updated: 02 February 2020

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Budget 2020 introduced Section 115BAC, offering individuals and HUFs the option to pay tax at reduced rates from FY 2020-21 onwards. To avail these lower rates, taxpayers must forgo various deductions and exemptions, including those for HRA, LTA, standard deduction, and most Chapter VI-A deductions. This new regime aims to simplify tax filing but may result in higher tax liabilities for those who benefit significantly from current deductions.

In the Budget 2020 presented on 1st February 2020 by Finance Minister Smt. Nirmala Sitharaman. It has been proposed to provide option to individual and HUF by insertion of section 115BAC in the Income Tax, Act 1961, which provides the following:- 1. On satisfaction of certain conditions, an individual or HUF shall, from financial year 2020-21 onwards, have the option to pay tax in respect of the total income at following rates: Total Income (Rs) Rate

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1 Year PLAN

1999

(Excl. of GST ₹359)

BEST VALUE

2 Years PLAN

3499

(Excl. of GST ₹629)

3 Months PLAN

999

(Excl. of GST ₹179)

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About the Author

CA Nayan Goyal

Assistant Manager at Power Finance Corporation Limited

I am a Chartered Accountant and cleared my CA final exams in May 2019 with an All India First Rank. I am currently working with Power Finance Corporation Limited as an Assistant Manager.

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