Section 115BAC provides a new tax regime for certain taxpayer like Individuals, HUF, AOP (Except co-operative society), BOI, Artificial Judicial Person which has reduced tax slabs. However, to avail of the benefit of this tax regime, the assessee has to forgo specified exemptions, deductions and benefits.
- Now, it is default tax regime i.e. new tax regime.
- If taxpayer wants to opt old tax regime, then it is to be exercised as follows:
| If having income from Business or profession | · On or before the due date of filing ITR
· Form 10_IEA · Once exercised shall apply to subsequent years also · Can once withdraw this option |
| If not having income from Business or profession | · Along with ITR |
(A) Certain Taxpayer:
For AY 2024-25 (FY 2023-24), it is available for Individuals, HUF, AOP (Except co-operative society), BOI and Artificial Judicial Person. Earlier, it is available to Individuals and HUF only.
(B) Reduced Tax Slabs:
(a) Comparison of tax under old tax regime and new tax regime are as under (Age < 60 Years):
| OLD REGIME | NEW REGIME | |||
| Slab | Rate | Slab | Rate | |
| Upto Rs. 2.5 Lakhs | Nil | Upto Rs. 3 Lakhs | Nil | |
| Rs. 2.5 Lakhs to Rs. 5 Lakhs | 5% | Rs. 3 Lakhs to Rs. 6 Lakhs | 5% | |
| Rs. 5 Lakhs to Rs. 10 Lakhs | 20% | Rs. 6 Lakhs to Rs. 9 Lakhs | 10% | |
| Above Rs. 10 lakhs | 30% | Rs. 9 Lakhs to Rs. 12 Lakhs | 15% | |
| Rs. 12 Lakhs to Rs. 15 Lakhs | 20% | |||
| Above Rs. 15 Lakhs | 30% | |||
(b) Surcharge on Income tax:
| OLD REGIME | NEW REGIME | |||
| Income | Rate | Slab | Rate | |
| Exceeds Rs. 50 Lakh and upto Rs. 1 Crore | 10% | Exceeds Rs. 50 Lakh and upto Rs. 1 Crore | 10% | |
| Exceeds Rs. 1 Crore and upto Rs. 2 Crore | 15% | Exceeds Rs. 1 Crore and upto Rs. 2 Crore | 15% | |
| Exceeds Rs. 2 Crore and upto Rs. 5 Crore | 25% | Exceeds Rs. 2 Crore and upto Rs. 5 Crore | 25% | |
| Exceeds Rs. 5 Crore | 37% | Exceeds Rs. 5 Crore | 37% 25% | |
| Maximum surcharge of 15% in case of Income from dividend and capital gain u/s 111A (Short term capital gain on shares), 112A (Long term capital gain on shares) and 115AD (Tax on income of FIIs) | ||||
(c) Health and education cess of 4% on Basic tax and surcharge will be added to income tax liability.
(d) Rebate u/s 87A:
- Available only to an Individual resident in India
- Not available to Non-Resident individual
| OLD REGIME | NEW REGIME | |||
| Condition | Benefit | Condition | Benefit | |
| If total income does not exceed Rs. 5 Lakh | 100% of income tax or Rs. 12500 whichever is less | If total income does not exceed Rs. 7 Lakh | 100% of income tax or Rs. 25000 whichever is less | |
| If total income exceeds Rs. 5 Lakh | – | If total income exceeds Rs. 7 Lakh | – | |
| Introduction of Marginal Relief:
If Income tax > Income above Rs. 7 Lakh Then, Income tax (-) Income above Rs. 7 Lakh, shall be allowed as deduction u/s 87A. |
||||
(C) Exemptions, deductions and benefits not available
| S. No. | Section | Remarks |
| 1. | 10(5) | Leave Travel Concession / allowance (LTC) |
| 2. | 10(13A) | House Rent allowance (HRA) |
| 3. | 10(14) | Allowances granted to meet expenses incurred in the performance of duties of an office or to meet his personal expenses |
| 4. | 10(17) | Daily allowances |
| 5. | 10(32) | Deduction of Rs. 1500 in case of clubbing of income of minor child |
| 6. | 10AA | Deductions in case of newly established units in SEZ |
| 7. | 16(ii) | Entertainment allowance to Government employees |
| 8. | 16(iii) | Employment tax |
| 9. | 24(b) (in respect of property referred in 23(2)) | Interest on housing loan on:
· house which is occupied by the owner for his own residence · house which cannot be occupied by reason of the fact that owing to his employment, business carried at any other place, he has to reside at that other place. |
| 10. | 32(1)(iia) | Additional Depreciation |
| 11. | 32AD | Investment in new plant or machinery in notified backward areas in certain states |
| 12. | 33AB | Deduction on account of Tea, coffee and rubber development account |
| 13. | 33ABA | Deduction on account of site restoration fund |
| 14. | 35(1)(ii), 35(1)(iia)
35(1)(iii) 35(2AA) |
Expenditure on scientific research |
| 15. | 35AD | Deduction in respect of expenditure on specified business |
| 16. | 35CCC | Expenditure on agricultural extension project |
| 17. | Chapter VI-A
Other than 80CCD (2), 80CCH (2), 80JJAA |
· No 80C, 80D etc (LIC, Housing loan, PPF, Tax saver FD, ELSS, Medical insurance)
· Employer contribution in pension scheme u/s 80CCD(2) is available · Central government contribution in the Agniveer corpus fund is available. · Deduction in respect of employment of new employees in case of an assessee to whom 44AB applies is available. |
| 18. | Set off of any loss carried forward or depreciation from earlier assessment years, if such loss or depreciation is attributable to any of deductions referred as above. | |
| 19. | Set off of any loss under the head “Income from House property” with any other head of income | |
| 20. | Additional depreciation of 25% u/s 32(1)(iia) | |
| 21. | Other exemption or deduction for allowances or perquisite, provided under any other law for the time being in force. | |
Note:
- Standard Deduction of Rs. 50000/- u/s 16(ia) against salary income is available from AY 2024-25 (FY 2023-24)
- Employer contribution in pension scheme u/s 80CCD (2) is available.
- Central government contribution in the Agniveer corpus fund is available.
- Deduction in respect of employment of new employees in case of an assessee to whom 44AB applies is available.
- Depreciation under section 32, except additional depreciation is available.
- Any allowance for travelling for employment or on transfer is available.
- Any allowance, whether, granted on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty is available.
- Any allowance granted to meet the expenditure incurred on conveyance in performance of duties of an office or employment of profit is available. Provided that free conveyance is not provided by the employer.
- Transport allowance for specially-abled person is available.
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Disclaimer: This article is for informational/educational purposes only & the Author has made all the efforts to be accurate & upto date as on the date of the article. But it is not to be construed to be a substitute for legal advice which will be affected by individual circumstances. Readers must consult their own financial advisors and the author hereby disclaims any and all liability to any person for any loss or damage caused by relying on above article or by any errors or omissions in it, whether such errors or omissions result from negligence, accident or any other cause.
About Author: CA Sandeep Bansal, is a practising Chartered Accountant based out of Delhi since 2015 and is a fellow member of the Institute of Chartered Accountants of India and can be contacted at: E-mail: casandeepbansal2209@gmail.com, info@casandeepbansal.com
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