We all know that from Financial Year 2020-21, new regime of Income Tax Rate has been introduced under section 115BAC of the act. In budget 2020, finance minister Shrimati Nirmala Sitaraman has given choice to the tax payers to select either new regime or old regime. Rate of tax for Individuals, Hindu Undivided Family, Association of Person or Body of Individual are suggested, which are as under;
| Total Income Rs. | Assessment | Year | – | |
| 2023-24 | 2024-25 | |||
| Regular | New Regime | Regular | New Regime | |
| Up to 2,50,000 | Zero | Zero | Zero | Zero |
| 2,50,001 to 5,00,000 | 5% | 5% | 5% | 5% |
| 5,00,001 to 7,50,000 | 20% | 10% | 20% | 10% |
| 7,50,001 to 10,00,000 | 20% | 15% | 20% | 15% |
| 10,00,001 to 12,50,000 | 30% | 20% | 30% | 20% |
| 12,50,001 to 15,00,000 | 30% | 25% | 30% | 25% |
| More than 15,00,000 | 30% | 30% | 30% | 30% |
| Surcharge (where the total income is more than Rs.50lakhs but less than Rs. 1Crore) | 10% | 10% | 10% | 10% |
| Surcharge (where the total income is more than Rs.1crore but less than
Rs. 2crore |
15% | 15% | 15% | 15% |
| Surcharge (Where the total income is more than Rs.2crore but less than
Rs. 5crore |
25% | 25% | 25% | 25% |
| Surcharge (where the total income is more than Rs.5Crore)
Education Cess (Income tax + surcharge) |
37% 4% | 37% 4% | 37% 4% | 37%
4% |
| Basic Deduction
Resident Super Senior Citizen ( aged more than 80 years ) |
5,00,000 | 2,50,000 | 5,00,000 | 2,50,000 |
| For Senior Citizen above 60 years | 3,00,000 | 2,50,000 | 3,00,000 | 2,50,000 |
Section 115BAC
At present, income of an individual or HUF is chargeable to income tax at the rate in respect of the previous year relevant to the assessment year as provided in the First Schedule to the Finance Act, from assessment year 2021-22 and on words, section 115BAC provides for concessional rate of tax on income in certain cases.
The person who wish to accept this regime, will not get the benefit of sections 10AA, 32(1)(iia), 32AD, 33AB, 33ABA, 35(1)(ii), 35(1)(iia), 35(iii), 35(2AA), 35AD, 35CCC.
The Company, who wish accept this regime, will not get benefit of deductions under chapter VIA, except, benefit of 80CCD(2), relating to NPS contribution, 80JJAA and 80LA(IA).
Over and above benefit of sections 10(5), 10(13A),10(14), 10(17), 10(32) and section 16 are not available, but will get benefit of section 24(b) of the act.
Due to above deduction/relief, if there is a loss, it cannot be carried forward. Loss under the head income from house property, cannot be set off against any other income.
From assessment year 2024-25, this alternative tax regime considered as default and therefore, any tax payer wish to for old regime will have to file a declaration in 10IEA before due date of submitting return of income. Once they decide the regime, they cannot change. In case of income from business or profession, if the person has closed the business or profession or there is no income under this head, he can change the regime. If a person has selected this alternate, he cannot go for Minimum Alternate Tax (MAT).
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