Taxability u/s 115BAC vs Taxability under Normal Provisions of IT Act

Latish Alwani | Last updated: 14 April 2023

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This article compares the taxability under Section 115BAC with the normal provisions of the Income Tax Act, effective from Assessment Year 2024-25. It outlines the tax slabs and rates for Section 115BAC and details which deductions and exemptions are available or disallowed under each regime. The article also explains the conditions and implications of opting in or out of Section 115BAC, particularly for individuals with business income.

Section 115BAC vs Normal Tax Provisions: Choose Wisely

W.E.F. A.Y.2024-25
Section-115BAC (Summarised Provisions):
Provisions / Particulars	Description
Applicability	Individual, HUF, AOP (Other Than Co-operative Society), BOI, Artificial Juridical Person

Section-115BAC(1A)	The aforementioned Persons Needs to Pay Tax at the Rates Specified u/s-115BAC(1A)
	Total Income		Rate of Tax (%)	Slab Tax	Cumulative Tax
	From	To
	-	3,00,000	0	-	-
	3,00,001	6,00,000	5	15,000.00	15,000.00
	6,00,001	9,00,000	10	30,000.00	45,000.00
	9,00,001	12,00,000	15	45,000.00	90,000.00
	12,00,001	15,00,000	20	60,000.00	1,50,000.00
	15,00,001	Above	30

Availability of Deductions / Exemptions - Comparatives
	Particulars		Section	Normal Provisions	115BAC
	Chapter VI-A Deductions {Other Than 80CCD(2), 80CCH(2) 80JJAA}		Chapter VI-A	Allowed	Not Allowed
	Contribution by C.G., S.G. or Any Other Employer in Pension Scheme		80CCD(2)	Allowed	Allowed
	Contribution by C.G. in Account of Assessee in Agniveer Corpus Fund		80CCH(2)	Allowed	Allowed
	Deduction in Respect of Employment Generation		80JJAA	Allowed	Allowed
	Allowance to Member of Parliament / Legislature etc		10(17)	Allowed	Not Allowed
	Interest on Housing Loan {Self Occupied Property u/s-23(2)}		24(b)	Allowed	Not Allowed
	Interest on Housing Loan (Let Out Property)		24(b)	Allowed	Allowed
	Leave Travel Concession		10(5)	Allowed	Not Allowed
	Allowances / Reimbursement of Expenses		10(14)	Allowed	Not Allowed
	Against Minor Income Clubbing		10(32)	Allowed	Not Allowed
	House Rent Allowance		10(13A)	Allowed	Not Allowed
	Allowance to Member of Parliament / Legislature etc		10(17)	Allowed	Not Allowed
	Industry / Product Specific etc Deduction u/s-32AD, 33AB, 33ABA, 33 35AD & 35CCC		32AD, 33AB, 33ABA, 33, 35AD & 35CCC	Allowed	Not Allowed
	Additional Depreciation		32(1)(iia)	Allowed	Not Allowed
	Carried Forward Loss / Depreciation atrributable to above		115BAC(2)(ii)	Allowed	Not Allowed
	Exemptions / Deductions Allowed under Other Law		115BAC(2)(iv)	Allowed	Not Allowed


Exception	Persons Who Had Excercised Option u/s-115BAC(6)

Option to Pay Tax at Normal Provision by Exercising Option u/s-115BAC(6)	Criteria			Due Date of Exercise	Form
	i) Persons Having Income from Business or Profession			On or Before Due Date of ITR Filing u/s-139(1)	Awaited
	i) Persons Having Income from Business or Profession			Option Once Excercised Shall Apply for Subsequent Years
	ii) Persons Not Having Income from Business or Profession			Along With ITR	N.A.

Withdrawal of Option u/s-115BAC(6)	Allowed Only Once Other Than Previous Year in which it was Excercised

Repercussion of Withdrawal	Person Shall Never Be Eligible to Exercise such Option
	Exception:
	Persons Ceases to have Any Income from Business or Profession
	Option u/s-115BAC(ii) shall be Available in such cases

Attachment

1) Excel File Containing

Illustrations of Taxability of Income u/s-115BAC in Comparison with Taxability under Normal Provisions of the Income Tax Act, 1961 under Different Scenario's with Different Parameters which might help the Assessee's in Selecting Option.

Disclaimer: The aforesaid article presents the view of an independent writer who is an expert of Income Tax / GST Related Matters. The article is informative in nature and writer of the article shall not be responsible for any direct / indirect loss or liability incurred by the user/reader for taking any decisions based on the contents and information given in article. Please consult your tax consultant/tax advisor before making any decision.

Attached File : 60532_49500_115bac_vs_normal_provisions.xlsx

FAQ :

Section 115BAC is applicable to Individuals, HUFs, AOPs (other than Co-operative Societies), BOIs, and Artificial Juridical Persons.

Section 115BAC disallows most Chapter VI-A deductions, except for 80CCD(2), 80CCH(2), and 80JJAA. It also restricts certain exemptions like interest on housing loans for self-occupied property and leave travel concession.

Yes, individuals with income from business or profession can opt for Section 115BAC by exercising the option on or before the due date for filing their Income Tax Return (ITR) under Section 139(1).

The option can be withdrawn only once, other than in the previous year in which it was exercised. However, if withdrawn, the person shall never be eligible to exercise this option again, unless they cease to have any income from business or profession.

For total income between ₹6,00,001 and ₹9,00,000, the tax rate under Section 115BAC is 10%, resulting in a cumulative tax of ₹45,000.