Analysis of newly inserted section 115BAC (Concessional Tax Regime for Individual and Hindu Undivided Family)
1. The Finance Act, 2020 inserted new section 115BAC, the section provides that notwithstanding anything contained in other provision of Income Tax Act, 1961, Income tax payable in respect of Income of a person being individual and Hindu undivided family for FY 2020-20201 (AY 2021-2022) and thereafter shall be computed in following manner at the option of such person :-
|SI. No||Total Income (Rs.)||Rate of Tax (%)|
|1||Up to Rs. 2,50,000||NIL|
|2||From Rs. 2,50,001 to Rs. 5,00,000||5|
|3||From Rs. 5,00,001 to Rs. 7,50,000||10|
|4||From Rs. 7,50,001 to Rs. 10,00,000||15|
|5||From Rs. 10,00,001 to Rs. 12,50,000||20|
|6||From Rs. 12,50,001 to 15,00,000||25|
|7||Above Rs. 15,00,000||30|
2. In order to opt above scheme of tax the person (Individual and Hindu undivided family) is required to fulfil following conditions: –
i. the person, having income other than income under the head “Income from Business or profession, is required to exercise along with filing return of Income under section 139(1), meaning thereby in order to opt concessional tax regime under 11BAC, the person is required to file return within due date as provided u/s 139(1). Every year the option is required to be exercised.
ii. the person, having Income including Income under the head” Income from Business or profession” is required to exercise the option in prescribed manner on or before due date specified u/s 139 (1) for furnishing the return. Option exercised can be withdrawn only once and thereafter the person shall never be eligible to exercise the option again under 115BAC unless such person ceases to have any Income from business or profession.
3. Following exemption and deduction shall NOT be allowed: –
4. Income shall be computed without set off any loss, –
5. The loss and depreciation referred to in clause (ii) of sub-section (2) shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year: Provided that where there is a depreciation allowance in respect of a block of assets which has not been given full effect to prior to the assessment year beginning on the 1st day of April, 2021, corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2020 in the prescribed manner, if the option u/s 115BAC is exercised for a previous year relevant to the assessment year beginning on the 1st day of April, 20
6. In case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA, which has exercised option u/s 115BAC , the deduction under section 80LA shall be available to such Unit subject to fulfilment of the conditions contained in the said section. Explanation. —For the purposes of this sub-section, the term “Unit” shall have the meaning assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005.
Disclaimer: This Article had been written to provide basic understanding of section 115BAC of Income Tax in a simple manner. The author shall not be responsible for any of the decision made based on the contents of this document