The budget was expected to be a path breaking one, being the first budget of the new decade. However, as has been the case with earlier budgets, it is bound to fall short of middle class expectations, who will be required to make their choices very prudent so as not to indulge in too much of consumption at the cost of their compulsive savings u/s 80-C, which was meant generally for their old age. Most talked provision in budget is INSERTION OF Section 115BAC
The new Sec. 115BAC has proposed to be inserted to provide an option to Individual or HUF’s to pay tax at lower rate subject to certain conditions. This will be applicable for AY 21-22 i.e FY 20-21
This section is optional and the option shall be exercised for every previous year where the assessee has no business income.
Furthermore, if the assessee having business income than in that case the option once exercised for the P.Y. shall be valid for that P.Y. and for all subsequent years. The option can be withdrawn only once other than the previous year in which exercised and shall be continued with Normal provisions of Income Tax (other than 115BAC) thereafter, till ceases to have any business income. We have made comparison chart showing taxation based on both regimes. THIS WILL TAKE CARE OF SALARIED & NON-SALARIED ASSESSEE
At Last , we want to comment that, Indian Income tax was WAY OF FINANCE PLANNING . Indirectly middle class was inspired to Buy house on Loan , Take Life insurance, take Mediclaim because There were Deductions (Still there but Mindset will change)
So Earlier, Invest and Save Tax
NOW, Why Invest? , Just Save Tax
It is very saddening to see that , Previous generation has saved enough to Enjoy retirement . Probably Our generation and our next generation will go away from habit of investing and saving.
Anyways , We are here comparing the new regime versus old regime
Interestingly , New regime is definitely not beneficial for Middle class & lower middle class. check below comparison
Hope you find article worth reading & it will make you more clear. Also if there is any error or suggestion , you can reach me at firstname.lastname@example.org or message me at 9879831157