Concessional rate of Tax applicability for individual business owners, Individuals, HUF and professionals as per the new amendment of Finance bill 2020 for Financial year 2020-21
Please read the entire article to get a hold of the optional tax benefit given to Individuals & HUF
New tax structure is as follows:
|Annual Income||New Income Tax Slab Rate|
|Nil to Rs. 2.5 lakh||Exempt|
|Above Rs. 2.5 lakh to Rs. 5 lakh||5%|
|Above Rs. 5 lakh to Rs. 7.5 lakh||10%|
|Above Rs. 7.5 lakh to Rs. 10 lakh||15%|
|Above Rs. 10 lakh to Rs. 12.5 lakh||20%|
|Above Rs. 12.5 lakh to Rs. 15 lakh||25%|
|Above Rs. 15 lakh||30%|
However, to claim the above tax rate benefits there are few deductions which cannot be claimed while you file your ITR
Few deductions that are allowed under the new scheme
Please note that the new tax regime is optional. You can continue with your old tax regime and claim all the above benefits which is not available if you go for new tax regime. To opt for new tax regime, you have to exercise the option before the due date of furnishing his return of income. Even professionals can claim this benefit.
The new tax rates as mentioned above are really less but it takes away lot of deductions which the individuals and HUF had before. In my opinion, the new tax rates will be beneficial for high income tax earners who fall in the bracket of 30% as these deductions are really marginal for them. However, for income upto 10 lacs, people can go for this concessional rate of tax.
Let me know your opinion.