As we all aware that one of the most important amendment brought by Finance Act, 2020 is the New Tax Regime with lower rate of tax introduced mainly for individual, HUF and Co-operative Societies. Now CBDT by issuing notification has clarified regarding the compliance requirement to opt for this new tax regime. The Notification No 82/2020 dated 01 October, 2020 has covered it in detail. Today in this article we will discuss in detail these new rules of compliance.
As per this section, the Individual and HUF have an option to opt for this new tax regime but subject to sacrificing the following allowances or deductions:
The Tax Rate as per New Tax Regime are as under:
|Total Income||Rate of tax|
|Upto Rs. 2,50,000||Nil|
|From Rs. 2,50,001 to Rs. 5,00,000||5%|
|From Rs. 5,00,001 to Rs. 7,50,000||10%|
|From Rs. 7,50,001 to Rs. 10,00,000||15%|
|From Rs. 10,00,001 to Rs. 12,50,000||20%|
|From Rs. 12,50,001 to Rs. 15,00,000||25%|
|Above Rs. 15,00,000||30%|
As per this section, the Co-operative Society have an option to opt for new tax regime under which tax at the rate 0f 22% can be charged in the place of existing tax rate of 30% but subject to sacrificing the following allowances or deductions:
These both the sections are come into implementation with effect from 01 April, 2021 i.e from AY 2021-22.
CBDT vide Notification 82/2020 dated 01 October, 2020 has inserted two new forms as a mandatory compliance before opting for this new tax regime.
FORM No. 10-IE – Application for exercise/ withdrawal of option under clause (i) of sub-section (5) of section 115BAC of the Income-tax Act, 1961
FORM No. 10-IF- Application for exercise of option under sub-section (5) of section 115BAD of the Income-tax Act, 1961.
This form has to be mandatorily filed by the Individual or HUF or Co-operative society just to inform the government that they are opting for new tax regime.
1. As per Section 115BAC, an individual or HUF having business income shall submit this form on or before the due date of filing ITR.
And for all other individuals or HUF, the form can be submitted alongwith ITR filing.
2. As per Section 115BAD, the co-operative society shall submit this form on or before the due date of filing ITR.
The option in Form No. 10-IE and Form No. 10-IF shall be furnished electronically either under digital signature or electronic verification
The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall, –
(i) specify the procedure for filing of Form No. 10-IE and Form No. 10-IF
(ii) specify the data structure, standards and manner of generation of electronic verification code, referred to in sub-rule (2), for verification of the person furnishing the said Form; and
(iii) be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to the Form
The important point here to note that the Forms are just notified by the CBDT it is still not available on Income Tax Website, but expected to be available soon.
Details required in Form 10-IE
Details required in Form 10-IF
We hope the article has clarified all the doubts regarding compliance requirements towards Section 115BAC and Section 115BAD. Hence, please don’t forget to comply with the same otherwise, you will not be allowed to take the benefit of new tax regime and your income will be tax according to the old tax slab only.
(Article is co-Authored by CA Prapti Raut)