- Sweta Makwana
- | Income Tax - Articles
- 09 Apr 2020
- 5,958 Views
- 1 comment
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
- Chapter VIA Deductions like Insurance, Mediclaim, housing loan, donation, educational loans, etc.
- Sec 24b deduction which is interest repayment on housing loan upto 2 Lakh
- Section 35/ 35AD/ 35CCC,
- Clause (iia) of Section 57. (family pension)
- No set off losses from earlier assessment year.
- No claiming of depreciation u/s 32 of Income tax act
- No exemption or deduction with respect to allowance or perquisites like house rent allowance, Leave travel allowance, deduction for employment allowance, professional tax etc.
Few deductions that are allowed under the new scheme
- Any allowance for the cost of travel or transfer
- Daily allowance given under certain conditions by the employers
- Transport allowance given for handicapped
- Deduction in respect of contribution to pension account
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.
Author Bio
My Published Posts
More Under Income Tax
One Comment
Leave a Comment
Latest Posts
- FAQ’s on ICSI CPE Hours {Credit Hours}
- Have You Missed The Action on The Intimation Notice Received – E- Campaign?
- Types of Taxes You Pay While Investing in the Stock Market
- Fast Track Merger | Section 233 | Companies Act, 2013
- Importance of NBFC Collaboration with the Financial Entities
- MCA Rules make more disclosure Requirement on Financial Statement
- Pre-Packaged Insolvency Resolution Process for MSME Sector
- Social Security Code 2020 & Benefits of Funding Option for Companies
- Deduction of amounts paid towards education cess allowable
- E-way Bill – A Journey of Three Years
Popular Posts
- Join GST, Customs & Income Tax Courses at Flat 40% Discount
- Due date of filing Form GSTR-3B, from January, 2021, onwards
- Managing Director and Whole Time Director in a Private Limited Company
- RBI replies on signing of non-audited financials by CAs
- Emergency Credit Line Guarantee Scheme (ECLGS)
Featured Posts
- Join GST, Customs & Income Tax Courses at Flat 40% Discount
- New Features of Form GSTR-2B & GSTR-3B Made Available To Taxpayers Under QRMP Scheme
- Updates in Forms GSTR-1, GSTR-3B & Matching Offline Tool for Taxpayers in QRMP Scheme
- 4-digit/6-digit HSN Code under GST
- Allotment of Instant PAN through Aadhaar Based e-KYC
Is car lease option is available under new tax regime or not ? by this option, sufficient tax is saved by giving lease amount to third person in old regime and against that perquisite value of Rs. 21,600/- is added to employee taxable income. Is this option available under new tax regime or not ?