Let’s get a comparative study of the pros and cons of both tax slabs available to the taxpayer, Your tax outflow will be effected in a below-depicted manner under the new tax structure. Instead of five different tax … However, to compensate for this, the tax rate has also been reduced. New Optional Income Tax Rates, Exemptions & Deductions Availability analysis, New Optional income tax regime for Individuals and HUF has been proposed in the budget 2020. Option once exercised can be withdrawn only once. Budget 2020 has proposed to introduce new income tax slabs sans 70 deductions and tax exemptions. To claim benefit of proposed tax rates, option is exercised, on or before the due date of return of income u/s 139(1). Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. This option can be taken by the individual or the HUF who has no business income. Income Tax Form 60: For those who don't have Pan Card in India, Tax Saving Benefits for Home Buyers with & without Home Loan, Income Tax Regime for Individual/HUF in India, Taxable income after basic exemption limit, Applicable to Individual, HUF, AOP, BOI, AJP, Taxpayers who are willing to take benefit of allowances like HRA, LTA etc and have contributions to PPF, LIC, PF, Home Loan repayment, donations, medical policies, NPS and other eligible tax saving instruments etc. Any individual looking to move to the new tax regime should bear in mind that he/she will have to give up the tax exemptions that were available under the old regime. 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 applicable provisions of the Act. Do a thorough calculation before making the switch to the new regime.
The only deduction that is still available under the Section 80C benefits is the benefit under Sec 80CCD (2).
House rent allowance (HRA): Varying amounts depending upon the salary structure and rent paid, Housing loan interest allowed under Section 24 of up to Rs 3.5 lakh for those claiming under affordable housing, Rs 2 lakh for others, Leave travel allowance: Tax-free if claimed once in a block of two years, Medical insurance premium: Rs 25,000 (Rs 50,000 for parents and senior citizens), Children Education Allowance: Rs 2250 per child/ Rs 6750 for hostel subsidy Look at the exemptions that you have been claiming to make the right decision of opting for the regimes. *The above calculations are excluding cess. Rs 5,00,000 for super senior citizens, Under the new tax regime there is only one exemption limit of Rs 2,50,000 which is applicable for both individuals and HUF, Budget 2020 : New Income Tax Slab Rate for Individuals u/s 115BAC. The new income tax slabs and rates have come … Here’s the answer, Senior citizens of advanced age , say above 75,suffering from critical illness like cancer should be exempted from tax and filing of return as they depend on others for survival through painful treatments.The government will do well to extend this help in the twilight of their lives.
Union Budget 2020 has proposed a new tax structure by slashing income tax rates and rejigging the income tax slabs to reduce total tax liability by individuals.
As proposed in the new tax regime, 70 tax exemptions will be removed but the income between Rs 5 lakh and Rs 7.5 lakh will be taxed at 10% down from current 20%, income between Rs 7.5 lakh and Rs 10 lakh will be taxed at 15% … Another important point to be noted here is that the Annual Budget of 2020 has announced a new tax slab for individuals. Should you say goodbye ELSS mutual funds, welcome new income tax slabs? Very good useful information for salarised and other tax assessors, Inciting hatred against a certain community, Has working from home increased your tax liability? Health and Education Cess of 4% is charged on all Income Tax slabs on the total amount of Income Tax+surcharge payable A tax rebate of Rs 12500 under Sec 87A of Income Tax Act is available for individuals (only resident Individuals) whose taxable income is up to Rs 5 lakh even in the new tax regime. Which is partially true. It will be applicable from the FY 2020-21(AY 2021-22). In case of Business income, the option once exercised for a previous year shall by default be valid for that financial year and all subsequent years as well. Income tax slabs as per Union Budget 2020 Pixabay The government has introduced new 'optional' tax slabs for individual taxpayers. (i) Leave travel concession u/s section 10(5); (ii) House rent allowance u/s section 10(13A); (iii) Some of the allowance as contained in section 10(14); (iv) Allowances to MPs/MLAs as contained in section 10(17); (v) Allowance for the income of minor as contained in section 10(32); (vi) Exemption for SEZ unit contained in section 10AA; (vii) The standard deduction, a deduction for entertainment allowance and employment/professional tax as contained in section 16; (viii) Interest under section 24 in respect of self-occupied or vacant property referred to in sub-section (2) of section 23. Transport Allowance granted to a divyang (disabled) employee to meet the 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. Income Tax is the tax that is levied by the Government of India on the income earned by individuals and other entities like a Hindu Undivided Family or a Company. New income tax slabs: Will you gain by switching to new regime? Which income tax regime to adopt? For calculations, taxable income has been taken after all the deductions and allowances allowed (if any), Ans. However, deduction under section 80CCD(2) (employer contribution on account of the employee in notified pension scheme) and section 80JJAA (for new employment) can be claimed. The Union Budget 2020 introduced a new income tax regime with reduced tax rates for those willing to forego 70 tax-exemptions and deductions under it.