New tax system under Section 115BAC - Tax on Income of Individuals and Hindu Undivided Families
for the Fiscal year 2021-22
Under the Finance Act, 2021 Income-tax Act, 1961 ("Act"), a new section 115 BAC-tax on the income of individuals and Hindu undivided families has been removed and a new tax regime has been introduced. 01.04.2021. Individuals and HUFs have been given an option to pay lower income tax under the said section.
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If the conditions of subsection (2) of section 115 BAC of the Act are satisfied, it is relevant to calculate the income tax payable at the rate of a new tax on the total income of a person. Sub-section (2) of section 115 BAC of the Act can be read as follows
(2) For the purposes of subsection (1), the total income of a separate or undivided Hindu family shall be calculated, -
(i) Prescribed under section (5) or section (13a) or under exemption (14) (except for the rules laid down for this purpose) or without any exemption or discount except section (1) or section (32), section 10 Or section 10AA or section 16 or section 24 (in the case of property referred to in sub-section (2) of section 23) or section (iia) of sub-section (1) section 32 or section 32AD or section 33AB or section 33ABA or sub- Section (ii) or sub-section (iia) or sub-section (1) or sub-section (2AA) section 35 or 2 section 35 AD or section 35 cc or section 57 (iia) chapter 80CCA provision of sub-section (2) of section 80CCD or section 80 JJAA under any of its provisions;
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(ii) Without any loss set up -
(A) To bear the foregoing or depreciation from the previous assessment year, if such loss or depreciation is responsible for any waiver of the waiver referred to in section (i);
(B) With any other head of income entitled "income from home property";
(iii) Claims contempt under any provision of section 32 except section (iia) of sub-section (1) of the said section, prescribed in the prescribed manner;
And
(iv) Without any concessions or concessions for allowances or permits, whatever the name may be, given under any other law for the time being in force.
It is to be noted that this option will become invalid in the case of assessment year relating to the previous year where the person fails to meet the conditions included in sub-section (2) of the previous year and other provisions of this Act have not used the option for assessment year as compared to the previous year. Apply.
List of "not approved" general exemptions and exemptions under the new tax regime-
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Anyone opting for the New Tax Regime discount rate option will have to deduct some of the discounts and rebates available on the existing old tax rates. There are a total of 70 discounts and discounts that is not approved, the most commonly used ones are listed below:
• Waive travel allowance (LTA);
• House Rent Allowance (HRA);
• Vehicle allowance;
• Daily expenses during employment;
• Transfer allowance;
• support allowance;
• Child Education Allowance;
• Other special allowances [Article10 (14)];
• Standard discount on salary;
• Professional taxes;
• Interest in real estate (Article 24);
• Except for exemptions under Section VI-A (80C, 80D, 80E and more) (Section 80CCD (2)).
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List of "approved" exemptions under the new tax duty-
Transport allowances especially for able-bodied people;
Transport allowance for travel expenses;
Investment in notified pension the scheme under section 80 CCD (2);
Any allowance for travel for employment or relocation.
Specific dates for choosing a new tax regime options
It is stated that a person still has the option to pay tax under the existing tax rate, but if he wants to opt for a new tax system then he has to fulfil the conditions mentioned in sub-section (2) of section 115 BAC of the Act. That means he will have to deduct some allowable discounts and rebates under income tax. In addition, before a specified date under sub-section (5) of section 114 BAC of the Act, he has to choose the new tax system in the prescribed manner (as per Rule 21 A and Form 10-IE). Section 115 of the Act is a sub-section of 115 BAC
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(5) Nothing in this section applies unless the option is applied in the manner prescribed by the individual -
(i) To earn income from business or profession, to pay the return of income of the previous year starting on or before the 1st day of its pricing year on or before the date specified under sub-section (1) of section 1391 and Once this option is used, it will apply to subsequent assessment years;
(ii) There is income other than the income mentioned in section (i), the return of income-tax shall be submitted under section 139 (1) of the previous year relevant to the assessment year:
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