Article discusses Important Amendments applicable for AY 2020-21 (PY 2019-20) which includes Changes in Rebate under section 87A, Increase in Standard Deduction for Salaried employees, Increase in Tax Audit Limit, Amendment in Section 54 Provisions, Amendment in provisions related to deduction under section 80EEA and section 80EEB, Decrease in MAT rate, New Tax Rates for Corporate Assessees, Changes in TDS, Change in provisions related to Compulsory Income Tax Return filing and changes in Income tax rates.
Some Important Amendments applicable for AY 2020-21 (PY 2019-20) are noted below:
| Sl No | Head | Section | Particulars |
| 1 | Rebate | 87A | Limit of Reabate u/s 87A increased to Rs. 12,500/- from Rs. 2,500/-
To avail Rebate U/s. 87A the Net Total Income < Rs.5,00,000/-, then the rebate will be Rs.12,500/- or the tax amount which-ever is Lower. |
| 2 | Salary | 16(ia) | Standard Deduction increased to Rs.50,000/- from Rs.40,000/- |
| 3 | House Property | 23(4) |
|
| 4 | Tax Audit | 44AB | Relaxation from Tax Audit upto Rs. 5 Crore, if the following Conditions satisfied
|
| 5 | Capital Gain | 54 | An assessee can purchase/construct 2 residential houses (earlier one) if the Long Term Capital Gain < Rs. 2cr.
The Asseessee can avail this option only once in life time. |
| 6 | Deduction | 80EEA | Deduction for interest payable on loan taken by Individual from any financial institution for purchase of residential house property shall be allowed up to Rs. 1,50,000/- subject to following conditions:-
a) loan must be sanctioned during the PY 2019-20. b) Stamp duty value of the House < Rs.45,00,000. c) Assessee should not own any residential house property on the date of sanction of loan. Deduction u/s 80EEA is allowable from AY 20-21 onwards till the repayment of loan continues. |
| 7 | Deduction | 80EEB | Additional Deduction shall be allowed to Individual on interest up to Rs. 1,50,000/- payable on loan taken from financial institution for the purchase of electrical vehicle between the period 01.04.2019 to 31.03.2023. |
| 8 | Corporate Taxation | 115BAA & 115BAB | The Domestic Companies may opt for
|
| 9 | MAT | 115JB | MAT rate reduced to 15% from 18.5%. |
| 10 | Return Filing | 139(1) | Mandatory of return filing for the following cases:
|
| 11 | TDS | 194A |
|
| 12 | TDS | 194DA | If receipts from LIC > Rs. 1,00,000, then TDS to be done on the amount [other than amount exempt under section 10(10D)] @ 5% as against 1% previously. |
| 13 | TDS | 194I | Limit for TDS on Rent has increased to Rs. 2,40,000 as against Rs. 1,80,000 previously. |
| 14 | TDS | 194M | Individual / HUF (other than who are required to deduct TDS u/s 194C/194H/194J) shall have to deduct TDS @ 5% if payment > Rs. 50 lakhs paid as commission or brokerage or professional services to any resident. (w.e.f. 1.09.2019) |
| 15 | TDS | 194N |
|
Note: All TDS & TCS rates has been reduced by 25% for FY 2020-21 (i.e. TDS u/s 194J would be 7.5% instead of 10%). This cut rate will be applicable for the period from 14-05-2020 to 31-03-2021.
A) Income Tax Slab Rate for AY 2020-21 for Individuals/HUF:
Income tax slabs
| Taxable income | Tax Rate |
| Up to Rs. 2,50,000 | Nil |
| Rs. 2,50,000 to Rs. 5,00,000 | 5% |
| Rs. 5,00,000 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
From the AY 2020-21 rebate u/s 87A (only for Individual) is available only if the Net Total Income < Rs. 5,00,000/-. The quantum of maximum rebate will be Rs.12500/-.
B) Surcharge:
| Nature of Income | Range of Total Income | ||||
| Up to Rs. 50 lakh | More than Rs. 50 lakh but up to Rs. 1 crore | More than Rs. 1 crore but up to Rs. 2 crore | More than Rs. 2 crore but up to Rs. 5 crore | More than Rs. 5 crore | |
| Short-term capital gain covered under Section 111A | Nil | 10% | 15% | 15% | 15% |
| Long-term capital gain covered under Section 112A | Nil | 10% | 15% | 15% | 15% |
| Any other income* | Nil | 10% | 15% | 25% | 37% |
Surcharge is levied on the amount of income-tax at following rates if the total income of an individual, HUF, Artificial judicial person assessee exceeds specified limits
C) Tax Slab Rate for Domestic Company:
A domestic company is taxable at 30%. However, tax rate is 25% if turnover or gross receipt of the company does not exceed Rs. 50 crore.
Plus:
Applicable surcharge:
7% of tax where total income exceeds Rs. 1 crore
12% of tax where total income exceeds Rs. 10 crore
Applicable Education cess
4% of tax plus surcharge
D) Tax Rates for Foreign Company:
A foreign company is taxable at 40%
Plus:
Applicable surcharge:
2% of tax where total income exceeds Rs. 1 crore
5% of tax where total income exceeds Rs. 10 crore
Applicable Education cess:
4% of tax plus surcharge
E. Income Tax Slab for Co-operative Society:
| Taxable income | Tax Rate |
| Up to Rs. 10,000 | 10% |
| Rs. 10,000 to Rs. 20,000 | 20% |
| Above Rs. 20,000 | 30% |
Plus:
Surcharge: 12% of tax where total income exceeds Rs. 1 crore
Education cess: 4% of tax plus surcharge+
F) Income Tax Slab for Partnership Firm
Income Tax Rate – 30%
Surcharge: 12% of tax where net income exceeds Rs. 1 crore. (Subject to Marginal Relief)
Education Cess: 4% of tax plus surcharge.
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After I add my intraday profits to my salary, I am entitled to standard deduction, 80c benefits and amount paid to pm cares fund. Only after all these exemptions, I need to pay tax as per the slab I fall into. AM I CORRECT?
Excellent compilation.
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With regards
PRATAP SINGH SURANA
F.C.A…..KOLKATA
Excellent work done by you. It is very helpful to practitioners. Thank you and best wishes for you.
Very Informative..
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