In line with the options provided to the domestic company and co-operative societies, similar option proposed to individual or HUF upon satisfaction of certain conditions by incretion of new section 115BAC to pay concessional rate of tax on total income as follows:

Total Income (Rs.) Rate of Tax
Up to 2,50,000 Nil
From 2,50,000 to 5,00,000 5%
From 5,00,000 to 7,50,000 10%
From 7,50,000 to 10,00,000 15%
From 10,00,00 to 12,50,000 20%
From 12,50,00 to 15,00,000 25%
Above 15,00,000 30%

> The option shall be optional for every year for the Individual and HUF not having business income and in other cases the option once exercised shall be applicable forever.

> The option shall become invalid for the previous year if the Individual or HUF fails to satisfy the conditions and other provision of the Act shall apply.

> The total income shall be calculated without any deduction and exemptions as follows:

Section Deduction
Section 10(5) Leave travel concession
Section 10(13A) House rent allowance
Section 10(14) Some other allowances except specified below *
Section 10(17) Allowances to MPs/MLAs
Section 10(32) Allowance for income of minor
Section 10AA Deduction for units established in Special Economic Zones (SEZ)
Section 16 Standard Deduction, Entertainment allowance and employment / professional tax
Section 17 rule 3 Free Food and Beverage through vouchers provided to the employee
Section 24 Interest on House Loan
32(1)(iia) Additional Depreciation
Section 32AD Deduction for investment in new plant and machinery in notified backward areas
Section 33AB Deduction in respect of tea, coffee or rubber business
Section 33ABA Deduction in respect of business consisting of prospecting or extraction or production of petroleum or natural gas in India
Section 35(1)(ii) Deduction for donation made to approved scientific research association, university college or other institutes for doing scientific research which may or may not be related to business
Section 35(1)(iia) Deduction for payment made to an Indian company for doing scientific research which may or may not be related to business
Section 35(1)(iii) Deduction for donation made to university, college, or other institution for doing research in social science or statistical research
Section 35(2AA) Deduction for donation made to National Laboratory or IITs, etc. for doing scientific research which may or may not be related to business
Section 35AD Deduction in respect of capital expenditure incurred in respect of certain specified businesses, i.e., cold chain facility, warehousing facility, etc.
Section 35CCC Deduction for expenditure on agriculture extension project
Section 57(iia) Deduction from family pension
Any Provision of Chapter VI-A Any Deduction specified under this chapter except section 80CCD(2) [employer contribution in NPS] and section 80JJAA [for new employment]

> The total income shall be calculated without set off any loss

    • c/f depreciation u/s 32
    • Loss under head house property

> The total income shall be calculated without any exemption or deduction for allowances or perquisite, by whatever name called, provided under any other law for the time being in force;

> The loss and depreciation referred to in (ii)(b) above shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year

* However, following allowances notified under section 10(14) of the Act to the Individual or HUF exercising option under the proposed section shall be allowed:

1. Transport Allowance granted to a divyang employee to meet expenditure for the purpose of commuting between place of residence and place of duty

2. Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office;

3. Any Allowance granted to meet the cost of travel on tour or on transfer;

4. Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty

Concluding Remarks

Since new tax regime is option of each individual and HUF for each assessment year having income other than business income. Therefore, a comparative study need to be made for each year according to old as well as new regime and filed the return under the option which is more beneficial.

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Qualification: CA in Practice
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Location: GURUGRAM, Haryana, IN
Member Since: 27 Dec 2019 | Total Posts: 10
We are in Practice and dealing in Direct and Indirect taxation along with ROC Compliances. We handle the litigation matters in assessment and appeal. We provide expert advice in Transfer Pricing and International Taxation. We also deal in Government Grant and Incentive Scheme provided by central and View Full Profile

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3 Comments

  1. Subramanian says:

    The special slabs for senior citizens over 60 and over 80 are incorporated in the schedule A which fixes the tax rates. But no such special slabs for senior citizens are mentioned in the new section 115BAC which has introduced new slabs. Does this mean that in the new regime seinior citizens get no concession?

  2. Ramesh Dinkar Harne says:

    Please send me new tax slab for 2020/2021arecompletly exempt 500000/-to taxable income. And calculation form we are in confus mind give details

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