Section 115BAC: Summarized Table of Deductions or Exemptions not available in New Tax Regime
The introduction of the New Tax Regime under Section 115BAC of the Income Tax Act, 1961, marks a significant shift in India’s taxation landscape. This regime aims to simplify the tax structure and reduce the tax burden by offering concessional tax rates. However, it also eliminates various deductions and exemptions that were previously available. This article provides a comprehensive guide to the deductions and exemptions not available in the new tax regime, helping taxpayers make an informed decision about which tax regime to opt for.
Section 115BAC(2)
For the purpose of Section 115BAC(1A)
New Tax Regime of Income Tax Act 1961
- This article guides the taxpayer and help to analysis what deductions/exemptions are not available to claim in new tax regime so that taxpayer can easily conclude that what tax regime to be opt.
- In recent years, the Indian tax system has done with a many significant changes towards simplify the tax structure and reduce tax burden. One of the key aspects of this reform is the introduction of a new tax regime with standard deduction benefit, increase in rebate 87A and many more.
- Though New tax regime beneficial in term of tax expense, assessee must be continue to investing in Mutual Funds, make policies for self and family, contribution to pension scheme and many more as all are essential in current scenario.
Page Contents
What is New Tax Regime
Section 115BAC(1A)
The New Tax Regime provide concessional tax rates with elimination of deductions and exemption listed out in sub section 2. The income-tax payable in respect of the total income of a person, being an individual or Hindu undivided family or association of persons (other than a co-operative society), or body of individuals, whether incorporated or not, or an artificial juridical person, other than a person who has exercised an option under sub-section (6), for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2024, shall be computed at the rate of tax given in the following Table, namely:—
TABLE
| Sl. No. | Total income | Rate of tax |
| 1. | Upto Rs. 3,00,000 | Nil |
| 2. | From Rs. 3,00,001 to Rs. 6,00,000 | 5 per cent |
| 3. | From Rs. 6,00,001 to Rs. 9,00,000 | 10 per cent |
| 4. | From Rs. 9,00,001 to Rs. 12,00,000 | 15 per cent |
| 5. | From Rs. 12,00,001 to Rs. 15,00,000 | 20 per cent |
| 6. | Above Rs. 15,00,000 | 30 per cent |
Section 115BAC(2)
For the purposes of sub-section (1A), the total income of the person referred to therein, shall be computed without any exemption or deduction under the provisions of:
(i) clause (5) or clause (13A) or prescribed under clause (14) (other than those as may be prescribed for this purpose) or clause (17) or clause (32), of section 10 or section 10AA or clause (ii) or clause (iii) of section 16 or clause (b) of section 24 [in respect of the property referred to in sub-section (2) of section 23] or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or under any of the provisions of Chapter VI-A other than the provisions of sub-section (2) of section 80CCD or sub-section (2) of section 80CCH or section 80JJAA;
(ii) without set off of any loss,— (a) carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); (b) under the head “Income from house property” with any other head of income;
(iii) by claiming the depreciation, if any, under any provision of section 32, except clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed; and
(iv) without any exemption or deduction for allowances or perquisite, by whatever name called, provided under any other law for the time being in force.
Summarized Table of Deductions/Exemptions not available in New Tax Regime
| Sr. No | Section | Clause | Deduction/Exemptions Not allowed |
| 1 | Section 10 | Clause 5 | 1. Travel Concession or Travel Assistance
|
| Clause 13A | House Rent Allowance | ||
| Clause 14 | Special allowance/benefit other than perquisites to employee specifically granted to meet expenses wholly, necessarily and exclusively incurred in the performance of the duties of an office or employment of profit (perquisite also not allowed, covered in clause iv of sec 115BAC(2) | ||
| Clause 17 | Daily Allowance received to member of Parliament | ||
| Clause 32 | Rs. 1500 each minor child referred in section 64(1A) Chapter Clubbing of Income | ||
| 2 | Section 10AA | Income from Newly Established Units in Special Economic Zone (SEZ) | |
| 3 | Section 16 | Clause (ii) | Entertainment Allowance |
| Clause (iii) | Employment Tax | ||
| Clause (i) | 50000 standard deduction (From AY 24-25 standard deduction is eligible to claim) | ||
| 4 | Section 24 | Clause b | Interest on borrowed capital on self occupied property referred in section 23(2) of Income Tax Act. (Interest on borrowed capital for Let out property is eligible to claim, maximum to 2 lac per year) |
| 5 | Section 32(1) | Clause (iia) | Additional Depreciation @ 20% |
| 6 | Section 32AD | Depreciation on Investment in New P&M in notified backward area @15% for acquisition period between 2015 to 2020 | |
| 7 | Section 33AB | Tea Coffee Rubber Business: allowed a deduction of sum equal to amount of deposit or 40% of profit of such business of growing and manufacturing tea or coffee or rubber in India. | |
| 8 | Section 33ABA | Site Restoration Fund: allowed a deduction of sum equal to amount of deposit or 20% of profit of carrying on business consisting of the prospecting for, or extraction or production of, petroleum or natural gas or both in India and in relation to which the Central Government has entered into an agreement with such assessee for such business.
|
|
| 9 | Section 35(1) and Section 35(2AA) | Clause (ii) (iia) (iii) of Section 35(1) | In respect of expenditure on scientific research……..for detailed refer section 35(1) clause (ii) (iia) and (iii) |
| 10 | Section 35(2AA) | Where a company engaged in the business of bio-technology or in any business of manufacture or production of any article or thing, not being an article or thing specified in the list of the Eleventh Schedule incurs any expenditure on scientific research (not being expenditure in the nature of cost of any land or building) on in-house research and development facility as approved by the prescribed authority, then, there shall be allowed a deduction of a sum equal to one and one-half times of the expenditure so incurred. | |
| 11 | Section 35AD | Allowed a Deduction in respect of whole of capital expenditure incurred prior to commencement of operation of its specified business. (Refer section 35AD definition of specified business) | |
| 12 | Section 35CCC | A sum equal to expenditure on Agriculture Extension Project notified by the board accordance with the guidelines. | |
| 13 | Chapter VI A | Any of the provision of chapter VI-A are not eligible to claim in new regime except: | |
| Section 80CCD(2) | Deduction in respect of employer contribution to pension scheme of central government | ||
| Section 80CCH(2) | Deduction in respect of contribution to Agniveer Corpus Fund in the Agnipath scheme | ||
| 80JJAA | Deduction in respect of additional 30% of cost towards employment of new employee. (Refer section 80JJAA) | ||
| 14 | Section 115BAC(2) | Clause (ii) | without set off of any loss,— (a) carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); (b) under the head “Income from house property” with any other head of income |
| Clause (iv) | without any exemption or deduction for allowances or perquisite, by whatever name called, provided under any other law for the time being in force |
Conclusion: Choosing between the old and new tax regimes requires a careful analysis of one’s financial situation and tax planning strategies. The New Tax Regime under Section 115BAC offers lower tax rates but eliminates several deductions and exemptions. By understanding the deductions and exemptions not available under the new regime, taxpayers can better assess which option aligns with their financial goals and obligations. Ultimately, the right choice will depend on individual circumstances and future financial plans.
Author Bio
