Budget 2020 has announced a New Tax Regime (aka Alternate Tax Regime) u/s 115BAC which is applicable from FY 2020-21 (AY 2021-22). All individuals and HUF have an option to choose between Old regime (regular) or New regime depending upon their Income and Investments. What's different to the common belief is that it appiles to both Salaried and Business taxpayers.
Know more on the Choice, Benefits, and the Limitations.
The taxpayers are required to pay tax at concessional rates under New Tax regime (u/s 115BAC). The concessional tax rates under New Regime are as follows. If you want to know the difference between Old vs New Tax Regimes, refer Difference between Old Tax Regime and New Tax Regime
|1||Upto 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 Rs 15,00,000||25%|
|7||More than Rs 15,00,000||30%|
| Individuals and HUF opting New Regime u/s 11BAC are not liable to Alternate Minimum Tax (AMT) |
If the taxpayer wants to opt for New Regime, certain deductions/exemptions would not be allowed. Following are the deductions/exemptions not available for taxpayers opting for new regime.
Following are the deductions /exemptions not available under New Tax Regime for the tax payers who are filing returns under Business
While the general understanding from the Finance Ministry is that over the time, the department may sunset the old regime for good, the restrictions defined may confuse the taxpayers. Below is an effort to explain when to switch and the limitations.
CBDT has notified Form 10-IE. An Individual / HUF are required to fill and submit form 10-IE at the time of filing Income Tax Return if they want to opt for new regime for a particular financial year. The due date for submission of form 10-IE is same as filing income tax return i.e., July 31 unless extended.
The information in the Form 10-IE are already available part of the return and IT Return is a fact and having this form to be uploaded in addition to the IT Filing may add additional burden.
We @ EZTax.in assume that this requirement may be dropped soon and the ITD part of their new data exchange schema provide a facility for such as an additional questionnaire. If no such thoughts, we request the ITD to consider such meassure to ease the process of filing.
Refer Form 10IE for Opting New Tax Regime for more details.
While the Form 10IE is available Online, you may refer to Department announced Form 10IE for different reasons and where Online form may not be possible to fill.
The following information is required to be given in form 10-IE
Under New Tax Regime, certain losses are not allowed to be set off or carry forward. Following losses are not allowed.
No, the concessional rates under New Regime does not apply to incomes chargeable at special rates.
Yes, the rebate of Rs 12500 u/s 87A applicable to taxpayers whose Net Taxable income is less than Rs 5 Lakhs under Old Regime and New Regime
If your Income does not have Business/Profession Income, you can change the Tax Regime every year,
No, the declaration made to employer cannot be changed in the same financial year.
Filing form 10-IE within due date is mandatory to opt concessional tax rates under New Tax Regime. If Form 10-IE is not filed, the Income tax department will disallow the concessional rates and calculate the taxes under Old Tax Regime.
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