Section 115BAC

Section 115BAC

Section 115BAC 
Section 115BAC is the newly inserted section in the Income Tax Act, 1961 that deals with the new income tax regime. This section and alternate tax regime was introduced in Union Budget 2020 and is applicable to individuals and Hindu Undivided Families (HUFs) only.

The Budget 2020 introduces a new regime under section 115BAC giving an option to individuals and HUF taxpayers to pay income tax at lower rates. 
The new system is applicable for income earned from 1 April 2020 (FY 2020-21), which relates to AY 2021-22.



Income Tax Slab Rates for FY 2020-2021 (AY 2021-2022)
The Finance Minister introduced new tax regime in Union Budget, 2020 wherein there is an option for individuals and HUF (Hindu Undivided Family) to pay taxes at lower rates without claiming deductions under various sections. The following Income Tax slab rates are notified in new tax regime :      

      



Exemptions and deductions not claimable under the new tax regime
  1. Major Deductions under Chapter VIA (u/s 80C, 80CCC, 80CCD, 80DD, 80DDB, 80E, 80EE, 80EEA, 80G, 80IA, etc)
  2. Standard Deduction
  3. Allowances u/s 10(14)
  4. Deductions u/s 32AD, 33AB, 33ABA, 35AD, 35CCC
  5. House Rent Allowance (HRA) u/s 10(13A)
  6. Leave Travel Allowance u/s 10(5)
  7. Deduction for Entertainment Allowance and Employment/Professional Tax u/s 16
  8. Exemption for SEZ unit u/s 10AA
  9. Home Loan Interest u/s 24(b)
  10. Deduction for Donation or Expenditure on Scientific Research
  11. Depreciation u/s 32(iia)
  12. Deduction from Family Pension u/s 57(iia)

What are the exemptions and deductions available under the new regime
While most of the income tax deductions have been discontinued under the new income tax regime (as mentioned in the earlier section), the following deductions are allowed:

  1. 80CCD(2) - The employer’s contribution to notified pension account under Section 80CCD (2) of the Income Tax Act. However, this deduction cannot exceed 10% of the employee’s previous year’s salary.
  2. Conveyance Allowance for Performance of Office Duties
  3. Deduction u/s 80JJAA (additional employee cost)
  4. Any Allowance for the Cost of Travel/ Tour/ Transfer
  5. Transport Allowance for Differently Abled Employees (Divyang)
  6. Daily Allowance given to Employees under Certain Conditions

Hope this helps.

    • Related Articles

    • Specified Business under section 35AD 

      Specified Business under section 35AD for AY 2020-21 What is section 35AD? It is basically a deduction available towards expenditure on specified business under section 35AD of the Income Tax Act. As per provisions of section 35AD, the deduction is ...

    • TDS- Deductions under Section 80U

      TDS- Deductions under Section 80U In computing the total income of an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of ...

    • Section 194J – Fees for professional or technical services

      Section 194J – Fees for professional or technical services New section codes 194J (a) and 194J (b) are added in Form 26Q,  Same should be applicable for statements pertains to FY 2020-21 onwards 194J (A).  The existing section code 194J (i.e. Fees ...

    • ITR 7 - Where we can enter Deductions under section 57

      ITR 7 - Where we can enter Deductions under section 57 The income chargeable under the head "Income from other sources" shall be computed after making the following deductions, namely :—  (i)  in the case of 17[dividends, other than dividends ...

    • ExpressITR || Specified Business Income Under Section 35AD

      Specified Business Income Under Section 35AD in Express ITR To record "Specified Business" income under Section 35AD in Express ITR, follow these steps: Step 1: Access the Return Flow Open the client profile in Express ITR. In the ITR Summary ...