A non-salaried taxpayer has to choose the new regime when filing the tax return. They need not declare or intimate their choice to anyone during the year. However, a non-salaried taxpayer (taxpayers with an income from business or profession) cannot opt-in and opt-out of the new tax regime every year.
The new tax regime is different in two ways from the old one. Firstly, it has more slabs with lower tax rates. And secondly, all the major exemptions and deductions available to taxpayers in the existing (old) tax regime are not allowed if the new tax regime is chosen.
While Filing an ITR
Anytime in the financial year before the ITR filing, you cannot switch to another regime.
Important Attributes of the New Tax Regime Under Section 115BAC. The aforesaid new tax regime is applicable from Financial Year 2020-2021. The new income tax regime is optional you may or may not opt for the new tax regime. In case of not opting for a new tax regime, the old tax regime shall be applicable.
The above table shows that it is beneficial to opt for the New Tax Regime of Section 115BAC if your Income is more than Rs. 8,50,000 with your eligible Deduction under 80C. The selection of New Tax Regime of Section 115BAC is not advisable up to your income Rs.
People are not able to decide which one to opt for. The new tax regime is available only to Individuals as well as to an HUF whether you are a resident or a non-resident and is optional. The new tax regime offers you concessional rates upto total taxable income of Rs.
Under the new regime, around 70 tax sops (rebates / deductions / exemptions) are not available, such as house-rent allowance (HRA), Leave travel Allowance (LTA) or housing loan interest payment. “The new tax regime benefits new employees or youngsters who may not save in the initial years of their career.
Hence, a salaried taxpayer can opt in and opt out every year. That means you can choose the new tax regime in one year and choose the regular tax regime in another year. A non-salaried taxpayer has to choose the new regime when filing the tax return.
Ans; Yes, it is mandatory to file Form 10IE if you want to opt for new tax regime and have Income under the Head “Profits and Gains of Business and Profession.”
If an individual has a salary of Rs 8 lakh per annum, and he/she has opted for a new income tax slab regime, then an income tax will be Rs 46,800. It is calculated without any exemptions and deductions. An individual can save Rs 28,600 more as compared to an old tax regime.
For a salary ranging between Rs 20 lakhs and Rs 25 lakhs, the applicable tax rate under the new tax regime would be the highest, that is 30%.
Under this new tax regime, your salary of Rs. 6.5 LPA would fall under the tax slab of 10%. This flat tax rate is far lower than the tax slab that your salary of 6.5 LPA would fall under with the existing tax regime - 20%.
Under the new tax regime, PPF contributions are not eligible for tax deductions u/s 80 C. The interest earned and the maturity amount of the PPF Account and Sukanya Samridhi Yojana will be eligible for tax exemption under the new tax regime.
Tax savings scheme under Section 80C, NPS under Section 80CCD(1b), education or house loans, and even insurance premiums can help you achieve the goal of zero tax in a given year if your annual salary is less than Rs 10 lakh per year.
The old tax regime is with various deductions to save tax. One can make specific tax saving investments and income to the extent of those investments would be free from taxation. The new tax regime is without any deduction. One can avail lower rates of new tax regime and cannot claim any deduction further to save tax.
The option to opt for new tax regime or remain in new tax regime has to be exercised by filing form no. 10 IE after end of the financial year.
Who can avail tax exemption on HRA? This tax benefit is available only to the salaried individuals (opting for old tax regime) who have the HRA component as part of their salary structure and is staying in rented accommodation. Self-employed professionals cannot avail this deduction.
If your income is below ₹2.5 lakh, you do not have to file Income Tax Returns (ITR).