Tax Rate Under New Tax Regime 2020 - 21 , Income Tax Circular

 

From 15 ' April 2020 onwards a new tax regime under section 115BAC is concurrently introduced to provide for a concessional rate of tax on the total income. Hence from Assessment Year 2021-22 ( Financial Year 2020-2021 ) there are two operative tax regimes One is the old tax regime where all the applicable deductions and exemptions are available and the tax rates are as per the rates of tax specified in the Finance Act , 2020. The second one is section 115BAC which is a new tax regime and claims of many specified deductions and exemptions have been omitted . Section 115BAC ( 1 ) of the Income Tax Act , 1961 provides an option for assessees to opt for the rates of Income Tax applicable for Financial Year 2020-21 ( AY 2021-2022 ) either New Tax Regime or Old Tax Regime whichever is beneficial to them . The Rates of Income Tax for the FY 2020-21 ( Ay 2021-22 ) are furnished below ;

Staff members should exercise an option in writing to OE Section on or before 10.11.2020 . regarding the rates of Tax to be applied in respect of their taxable income . Option once exercised shall be final and can be alter only at the time of filing IT Return for FY 2020-21 / AY 2021-22 with Income Tax Department . 

Such Officials opting for the New Tax Regime will have to forego the following Exemptions and Deductions : 

1. The standard deduction , professional tax and entertainment allowance on salaries 

2. Leave Travel Allowance ( LTA ) 

3. House Rent Allowance ( HRA ) 

4. Minor child income allowance 

5. Helper allowance 

6. Children education allowance 

7. Other special allowances ( Section 10 ( 14 ) ] 

8. Interest on housing loan on the self - occupied property or vacant property ( Section 24 ) 

9. Chapter VI - A deduction ( 80C , 80D , 80E and so on ) ( Except Section 80CCD ( 2 ) and 8OJJAA )

Income Tax Circular - Download here...