A new scheme of taxation has been introduced by the Finance Act ,2020 by insertion of a new Section 115BAC. The basic feature of this new tax regime is lower tax rates as compared to existing slab rates but on the other hand the assessee has to forego around 70 exemptions and deductions presently available .
The Budget 2020 introduces a new regime under section 115BAC giving individuals and HUF taxpayers an option to pay income tax at lower rates. The new system is applicable for income earned from 1 April 2020 (FY 2020-21), which relates to AY 2021-22.
The new Section 115BAC of the Income-tax Act, 1961 provides that a person, being an individual or an undivided Hindu family (HUF) having income other than income from profession or business, may exercise the option concerning of a previous year to be taxed under the Section 115 BAC along with his/her return of income ...
Opting New Tax Regime will take away many exemptions such as HRA Exemption, etc and Deductions including Section 80C, 80D etc. From the assessment year 2021-22 (FY 2020-21), individual and HUF taxpayers have an option to opt for taxation under section 115BAC of the Act.
The option of new tax regime is available to all individuals and HUFs. This is optional. Under the new tax regime tax is payable at lower slab rates on the income up to Rs. ... If you wish to opt for the new tax regime you have to forgo various tax deductions and exemptions otherwise available under old regime.
The tax regime defines the tax slabs and rates. In 2020 the government introduced a new tax regime with higher tax rates but more options for tax savings. The new tax regime also gives taxpayers the option to select either old or new regimes making taxation all the more complicated.
Yes. It is beneficial to those person who do not claim substantial additional deduction in returns, such as housing loan interest, nps, etc. Those who claim only standard deduction and deduction as per slabs in return will be benefited. The new income tax regime is good if you have low salary.
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.
From the FY 2020-21 the benefit under section 80TTB will only be available under the old tax regime and taxpayers opting for new tax regime cannot claim this benefit while filing ITR.
Individuals with business income will not be eligible to choose between the two regimes every year. Once they select a new tax regime, they have only once in a lifetime option for switching back to the old regime. Once they switch back to the old regime, they won't be able to choose a new regime anytime in future.
So, if the annual basic salary of the employee is Rs 5 lakh, one can avail a deduction of up to Rs 50,000 if the employer contributes towards employees NPS account. Going forward, if the new tax regime becomes the norm, as an employee making use of Section 80CCD(2) may help them save taxes.
There is no better slab. For those who invest traditionally as in the old regime, the old slab saves more tax. For those who go for riskier investments out of their money than tax saving investments, the new slabs save more tax.
If senior citizen with no interest income, no savings etc. go for new regime. In short, if you already have maximum 80C of 150000, and paying rent/home loan, you stick with old only. If no loan/rent, consider if you have addnl deductions such as med insurance, edu loan, donations etc.
Even if you don't have any home loan(both principal and interest are tax exempted upto a certain limit), education loan and 80CCD, old tax regime is better for middle class taxpayers and they could end up saving upto Rs. 15000/annum.
For FY 2021-22 and 2022-21, individual taxpayers will continue to choose between two tax regimes - the existing or old tax regime and the new, concessional one.
Regime is an accepted way things are done or a group that is in control and has power. An example of regime is military training. An example of regime is a dictatorship. The period during which a particular administration or system prevails.
The finance bill 2020 allows salaried individuals and pensioners with no business income to switch between the two tax regimes every assessment year as per their prevailing financial situation.
Section 80TTB is a provision whereby a taxpayer who is a resident senior citizen, aged 60 years and above at any time during a Financial Year (FY), can claim a specified amount as a deduction from his gross total income for that FY.
Can senior citizens claim both 80TTA and 80TTB? No, a senior citizen can claim deduction u/s 80TTA only. Who is eligible for an 80tta deduction? An individual taxpayer and a Hindu Undivided Family (HUF) are eligible for an 80TTA deduction.
Amount of Deduction under 80TTB
If the interest income is less than Rs 50000 then the total amount of interest income is tax-exempt. However, if the interest income is more than Rs 50,000 (including interest from all the deposits) then Rs 50,000 is available as a deduction.
If you are not interested in saving for a long term then the new slab is good for you. If your income is below 6 lakh then the old slab is good for you and if your income in is above 19 lakh then the new income tax slab 2020 is better for you. I think there is no bigger difference in old and new slab.