New Section 115BAC has been introduced in the art which has provided an option to the individual and HUF to opt for the new tax regime which has following key conditions;-
- This is an optional scheme i.e. assesse may or may not opt for the same.
- The scheme is for an individual or a Hindu undivided family
- The income-tax payable in respect of the total income of a person, for any previous year starting from 2020-21 and onwards shall be computed at the rate of tax given below:-
- For the above scheme following conditions needs to be fulfilled :-
- Leave travel concession u/s 10(5);
- House rent allowance u/s 10(13A)
- Allowance u/s 10(14) except those prescribed below:-
- Transport allowance granted to a divyang employee to meet expenditure for the purpose of commuting between place of residence and place of duty
- Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office.
- Any Allowance granted to meet the cost of travel on tour or on transfer;
- Daily allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty.
- Allowances to MPs/MLAs exempt u/s 10(17)
- Allowances for income of minor u/s 10(32)
- Exemption for SEZ unit contained in section 10AA
- Standard deduction, deduction for entertainment allowance and employment/professional tax
- Interest under section 24 in respect of self-occupied or vacant property.(Loss under the head income from house property for rented house shall not be allowed to be carried forward as per extant law)
- Additional deprecation u/s 32(1)(iia)
- Deductions under section 32AD, 33AB, 33ABA
- Various deduction for donation for or expenditure on scientific research as per section 35
- Deduction from family pension u/s 57(iia)
- Any deduction under chapter VIA except 80CCD(2) & 80JJAA (like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80IBA, etc)
- Another Condition id that the assessee should not set off any brought forward losses and unabsorbed depreciation of past years is the same is attributable to any deduction specified above. Also, the assessee is also not allowed to set off loss from house property with any other head of income.
- If any of the above conditions are not satisfied in any year, the assessee has to be assessee as per normal previous in that year.
- The option can be withdrawn only once where it was exercised by the individual of HUF having business income for a previous year other than the year in which it was exercised (i.e. First Year) and thereafter, the individual or HUF shall never to eligible to exercise option under this section.
