Additional new Tax regime is Optional in Nature.
Income Tax Slabs In Existing, as well as New Tax Regime, proposed in Budget 2020
|
S. No.
|
Income Slab
|
Existing Tax Rates
|
New tax Rates
|
|
1
|
Up to 2.5 Lakh
|
No tax
|
No Tax
|
|
2
|
From 2.5 lakh to 5 Lakh
|
5%
|
5%
|
|
3
|
From 5 lakh to 7.5 lakh
|
20%
|
10%
|
|
4
|
From 5 lakh to 10 lakh
|
20%
|
15%
|
|
5
|
From 10 lakh to 12.5 lakh
|
30%
|
20%
|
|
6
|
From 12.5 lakh to 15 lakh
|
30%
|
25%
|
|
7
|
15 lakh and above
|
30%
|
30%
|
|
|
Condition is that 70 tax exemptions are not available in New Tax Structure.
|
|
|
Note: Below Exemptions/Deductions not available in New Tax Regime:
Note:
- the option (Old slab or New Slab tax rate) once exercised for a previous year shall be valid for that previous year and all subsequent years.
- The new concessional Tax rate shall be applicable only if total income of the individual or HUF is computed without following exemptions and deductions:
|
Relevant Section of Income Tax Act
|
Description of Section
|
Amount of exemption/ Deduction not available
|
|
10(5)
|
Leave Travel Concession (LTC)
|
As per salary structure
|
|
10(13A)
|
House rent allowance (HRA)
|
As per salary structure
|
|
10(14)
|
Transport Allowance
|
As per salary structure, covered in the standard deduction
|
|
10(17)
|
Daily allowance received by a Member of Parliament or by a Member of State Legislature or by a member of any committee thereof
|
As per salary structure
|
|
10(32)
|
the income of a minor child
|
Rs. 1500
|
|
10AA
|
Special provisions in respect of newly established Units in Special Economic Zones
|
As per the Business structure
|
|
16
|
Standard Deduction
|
50,000
|
|
24(b)
|
Interest on Home Loan- in respect of self occupied property
|
2,00,000
|
|
32(1)
|
Depreciation on assets
|
As per Business structure
|
|
32AD
|
Investment in new plant or machinery in notified backward areas in certain States
|
As per Business structure
|
|
33AB
|
Tea development account, coffee development account and rubber development account
|
As per Business structure
|
|
33ABA
|
Site Restoration Fund
|
As per Business structure
|
|
35
|
investment-linked incentives
|
As per Business structure
|
|
35AD
|
Notified Scientific Research Association
|
As per Business structure
|
|
35CCC
|
expenditure on agricultural extension project notified by the Board
|
As per Business structure
|
|
57(iia)
|
Income in the nature of family pension
|
Maximum Rs 15,000
|
|
Chapter VI-A
80C
80D
80E
80G
And Other sections
|
Investment,
Medical
Interest on education loan
Donation
|
150000
50000
Interest Amount
Upto 10% of total income
|
Without set off of any loss,-
(i) Carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in (a) above; or
(ii) Under the head house property with any other head of income;
(c) by claiming the depreciation, if any, under section 32, except clause (iia) of sub-section (1) thereof, determined in such manner as may be prescribed; and
(d) without any exemption or deduction for allowances or perquisite, by whatever name called, provided under any other law for the time being in force.
(v) the loss and depreciation referred to in (ii)(b) above 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
Conclusion:
In our opinion, the Taxpayer should do his calculation or check with his consultant while adopting the option of Tax rates. Because in new optional tax slab, rates of tax have come down but reduced rates are applicable only after limitation on many exemptions and Deductions i.e you will be allowed to take exemption and deduction in many income tax provisions as tabled above.
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