In this Article we will understand mainly about Section 115BAC & Form 10-IE. Finance Act,2020 introduce NEW TAX REGIME. The Finance Minister announced new tax slab for Individuals, HUF and Co-operative societies.

Therefore, for inserting new tax slab Ministry has inserted two sections:

♦ Section 115BAC: New Tax Rate for income of Individuals and HUF

♦ Section 115BAD: New Tax Rate for income of Co-operative Societies.

In this article we will mainly focus on Sec 115BAC. These Sections are applicable from AY 2021-22 i.e., from FY 2020-21.

New Tax Slab

Total Income Rate of tax
Upto Rs. 2,50,000 NIL
From Rs. 2,50,001 to 5,00,000 5%
From Rs. 5,00,001 to 7,50,000 10%
From Rs. 7,50,001 to 10,00,000 15%
From Rs. 10,00,001 to 12,50,000 20%
From Rs. 12,50,001 to 15,00,000 25%
Above 15,00,000 30%

Some Key Points in this section: –

  • The new tax regime is applicable/ available from A.Y. 2021-22 onwards.
  • The new income tax regime is applicable to every Individual irrespective of their age means the tax slab is also applicable for Senior Citizen and super senior citizens.
  • The new tax regime is optional.
  • Rebate u/s 87 A is available for individual having Total Income less than Rs 5 lakh.

Deduction Not Allowed while Opting for NEW TAX REGIME: –

  • Standard deduction to salaried taxpayers;
  • Leave Travel Allowance (LTA);
  • House Rent Allowance (HRA);
  • Children education allowance;
  • Other special allowances [Section10(14)];
  • Deduction from family pension income;
  • Interest on housing loan on the self-occupied property or vacant property (Section 24);
  • Chapter VI-A deductions;
  • Exemption or deduction for any other perquisites or allowances;
  • Without setting off any loss carried forward or unabsorbed depreciation of earlier year;
  • No Depreciation u/s 32 [except clause (iia) of sub-section (1)] allowed;
  • Exemption for SEZ unit u/s 10AA;
  • Deductions u/s 32AD, 33AB, 33ABA, 35, 35AD, 35CCC;
  • In case of a Self-occupied property, you cannot claim a deduction on interest for a housing loan.

Deduction Allowed while Opting NEW TAX REGIME: –

  • Deduction u/s 80CCD (2) (employer’s contribution to your pension account);
  • Deduction u/s 80JJAA (additional employee cost);
  • Transport Allowance for Differently Abled Employees (Divyang);
  • Conveyance Allowance for performance of office duties;
  • Any Allowance for the cost of Travel/ Tour/ Transfer;
  • Daily Allowance given to employees under certain conditions.

Optional to switch between Old & New Tax Slab:

  • Individual having Business Income: – Individual having business income have option to switch to new regime once in a lifetime. That means once Individual choose new tax regime and then wants to switch to old regime then such individual will not be able to opt for New Tax Slab Again except such person cease to have any business income.
  • Individual having salaried and no business Income: – Individual having salary income with no business income have option to choose between the old tax slab and new tax slab every year i.e., he/she can switch regimes from year to year.

FORM 10-IE- Applicability for exercise/withdrawal of option under clause (i) of sub- section (5) of section 1115BAC of Income Tax Act, 1961

The taxpayer can file the ‘Form 10-IE’ electronically from the income tax e-filing portal. You can furnish the said form either under digital signature or through Electronic Verification Code (EVC).If Form 10IE is not filed, then department will calculate tax based on the old/existing tax regime.

Due Date of Filing Form 10IE

  • Having Business Income: Before the due date of Filing ITR.
  • Having Salary Income: On or Before the due date of Filing ITR.

Frequency of filing Form 10IE: –

Individual having Business Income: Twice, once to use the new tax regime and second time to switch back to old regime again.

Individual having salaried and no business Income: – Every Year, he/she have option to file form 10IE every year.

Content of Form: –

Basic details required to file Form 10IE are mentioned below:

  • Name of the individual / HUF
  •  Confirmation of whether the individual or HUF have any income under ‘Profit or gains from business and profession.
  • PAN number
  • Address
  • Date of birth/ date of incorporation
  • Nature of business/ profession (Mandatory in case of business income)
  • Confirmation in ‘yes/no’ of whether the taxpayer has any unit in IFSC (International financial service centre) as mentioned in sub-section (1A) of section 80LA. Suppose the answer is yes, then details of the unit to be provided.
  • Details of any previous Form 10IE filed.
  • Declaration

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Disclaimer: – The Above Article is Just for Purpose of Sharing Information.

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17 Comments

  1. sathiyanarayanan says:

    is Form10-IE is available in the e-portal. Let me know under which head it is available. please give in detail.
    Thanking you in advance.

  2. Aashna Pant says:

    Sir, I am a doctor and employed with Uttarakhand State Govt on contract basis. My salary for the F Y 2020-21 was ₹890000. The employer has deducted TDS of ₹8900.00. Will I get any refund by filing ITR4? Do I need to file form 10IE?

  3. Sunil Kumar Atal says:

    Very nice and useful Article.
    I think some discussion is needed regarding the due date for filing Form 10IE.
    You have mentioned Due Date of Filing Form 10IE as :
    Having Business Income: Before the due date of Filing ITR.
    Having Salary Income: On or Before the due date of Filing ITR.

    I think it should be :
    Having Business Income: On or before the due date of Filing ITR.
    Having Income other than business: Along with the Return of Income to be furnished u/s 139(1)

  4. Senthil Kumar says:

    Sir

    I am a non salary assessee, since I have no investments u/s. 80-C, Can I opt New tax regime for Asst.year 2021-22 and shift to old regime in future years or there is any restrictions to avail 115BAC.

    1. KOMAL AGARWAL says:

      Hi Senthil,
      As You are a non Salaried Individual you will have a single option to choose new tax regime. Once You choose for new tax regime and then next year you choose for old regime then you will loose benefit to choose new tax slab for all your future returns.
      For any consultation contact me:

      Thanking You
      CA Komal Agarwal
      8250462703
      [email protected]

    1. KOMAL AGARWAL says:

      Due Date of Filing Form 10IE for AY 21-22:-

      Having Business Income: Before the due date of Filing ITR.
      Having Salary Income: On or Before the due date of Filing ITR.

      Thanking You
      CA Komal Agarwal
      8250462703
      [email protected]

  5. Manish panchal says:

    Dear Sir new registration problem I try many time but not new registration Incometax PERSONALIZED MASSAGE NOT APPROVE , I TRIED MANY TIME REGISTRATION BUT PERSONALIZED MASSAGE ISSUE FACED EVERY TIME Please help me and reply

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