February 1, 2020
The Finance Minister, in the budget presented today proposed a new personal tax regime for individual and HUF assessees by inserting section 115BAC in the Act.
The section talks about the revision of the tax rates applicable on taxpayers based on their total income.This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years
Comparison between Old & New Tax Rates
| Total Income | Applicable Tax Rate under new regime | Applicable Tax Rate under old regime |
|
Income upto Rs. 2,50,000 |
NIL |
NIL |
|
Rs.2,50,000- Rs 5,00,000 |
5% |
5% |
|
Rs. 5,00,000- Rs 7,50,000 |
10% |
20% |
| Rs 7,50,000- Rs. 10,00,000 |
15% |
20% |
| Rs. 10,00,000- Rs. Rs 12,50,000 |
20% |
30% |
| Rs. 12,50,000 – Rs. 15,00,000 |
25% |
30% |
| Above Rs. 15,00,000 |
30% |
30% |
Please Note,
- The above mentioned new tax regime rates will be available only if the taxpayer does not claim any deductions or exemptions.
- This new tax regime is optional, which means the taxpayers still have an option to choose to file their returns after claiming deductions and exemptions as per the old tax regime.
- The option shall be exercised for every previous year where the individual or the HUF has no business income, and in other cases the option once exercised for a previous year shall be valid for that previous year and all subsequent years.
- The option shall become invalid for a previous year or previous years, as the case may be, if the Individual or HUF fails to satisfy the conditions and other provisions of the Act shall apply.
- To claim benefit of proposed tax rates, option is required to be exercised:
i) On or before the due date of return of income u/s 139(1) in case of Individual or HUF having business
income.
ii) In other case, along with return of income.
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