Incentives to Individual and HUF.In line
with options provided to domestic companies under the TLAA and proposed to be
provided to resident co-operative societies under this Bill, it is also
proposed to provide similar option to individual and HUF by insertion of
section 115BAC in the Act, which provides the following:-
(i) On satisfaction of certain conditions,
an individual or HUF shall, from assessment year 2021-22 onwards, have the
option to pay tax in respect of the total income at following rates:
NEW TAX SLAB ( NEW TAX REGIME) W.E.F. 01/04/2020
Total Income (Rs) Rate
Up to 2,50,000 Nil
From 2,50,001 to 5,00,000 5per cent.
From 5,00,001 to 7,50,000 10per cent.
From 7,50,001 to 10,00,000 15per cent
From 10,00,001 to 12,50,000 20per cent.
From 12,50,001 to 15,00,000 25per cent.
Above 15,00,000 30per
cent.
OLD
TAX SLAB ( OLD TAX REGIME W.E.F. 01/04/2019)
Income Tax rates for individuals below 60 years of age for FY 2019-20:
Taxable income
|
Tax Rates in India for
individuals below 60 years
|
INR 0 to INR 2,50,000
|
Nil
|
INR 2,50,000 to INR 5,00,000
|
5%
|
INR 5,00,000 to INR 10,00,000
|
₹12,500 + 20% of total income exceeding ₹5,00,000
|
Above INR 10,00,000
|
₹1,12,500 + 30% of total income exceeding ₹10,00,000
|
Income tax slabs for senior Citizens for FY 2019-20
Taxable income
|
Tax Rates in India for
Senior Citizen (Aged 60 but less than 80)
|
INR 0 to INR 3,00,000
|
Nil
|
INR 3,00,000 to INR 5,00,000
|
5%
|
INR 5,00,000 to INR 10,00,000
|
₹10,000 + 20% of total income exceeding ₹5,00,000
|
Above INR 10,00,000
|
₹1,10,000 + 30% of total income exceeding ₹10,00,000
|
Income Tax Slabs for Super Senior Citizens for FY 2019-20
Taxable income
|
Tax Rates in India for
Super Senior Citizens (Aged 80 years and above)
|
INR 0 to INR 5,00,000
|
Nil
|
INR 5,00,000 to INR 10,00,000
|
20%
|
Above INR 10,00,000
|
₹1,00,000 + 30% of total income exceeding ₹10,00,000
|
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(ii)The option shall be exercised for every
previous year where the individual or the HUF has no business income, and in
other cases the option once exercised for a previous year shall be valid for
that previous year and all subsequent years.
(iii)The option shall become invalid for a
previous year or previous years, as the case may be, if the Individual or HUF
fails to satisfy the conditions and other provisions of the Act shall apply;
(iv)the condition for concessional rate
shall be that the total income of the individual or HUF is computed,—
(a) Without any exemption or deduction
under the provisions of clause (5) or clause (13A) or prescribed under clause
(14) (other than those as may be prescribed for this purpose) or clause (17) or
clause (32) of section 10 or section 10AA or section 16 or clause
(b) Of section 24 [in respect of property
referred to in sub-section (2) of section 23] or clause (iia) of sub-section
(1) of section 32 or section 32AD or
section 33AB or section 33ABA or sub-clause
(ii) Or sub-clause (iia) or sub-clause
(iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or
section 35CCC or clause (iia) of section 57 or under any provisions of Chapter
VI-A other than the provisions of sub-section
(2) Of section 80CCD or section
80JJAA;(b)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)theloss 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 so however,
that where there is a depreciation allowance in respect of a block of asset
which has not been given full effect to prior to the assessment year beginning
on 1st April, 2021.
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Corresponding adjustment shall be made to
the written down value of such block of assets as on 1st April, 2020 in the
prescribed manner, if the option is exercised for a previous year relevant to
the assessment year beginning on 1st April, 2021;
(vi)the concessional rate shall not apply
unless option is exercised by the individual or HUF in the form and manner as
may be prescribed,-
A) where such individual or HUF has no
business income, along with the return of income to be furnished under
sub-section (1) of section 139 of the Act;
and 8b.in any other case, on or before the
due date specified under sub-section (1) of section 139 of the Act for
furnishing the return of income for any previous year relevant to the
assessment year commencing on or after 1st April, 2021 and such option once
exercised shall apply to subsequent assessment years;
(vii) If the individual or HUF has a Unit
in the International Financial Services Centre [clause (zc) of section 2 of the
Special Economic Zones Act, 2005], as referred to in sub-section (1A) of
section 80LA, the deduction under section 80LA shall be available to such Unit
subject to fulfillment of the conditions contained in that section;
and(viii)the option can be withdrawn only once where it was exercised by the
individual or HUF having business income for a previous year other than the
year in which it was exercised and thereafter, the individual or HUF shall
never be eligible to exercise option under this section, except where such
individual or HUF ceases to have any business income in which case, option
under Para (vi)(a) above shall be available.
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It is further proposed to amend section
115JC of the Act so as to provide that the provisions relating to AMTshall not
apply to such individual or HUF having business income.It is also proposed to
amend section 115JD of the Act so as to provide that the provisions relating to
carry forward and set off of AMT credit, if any, shall not apply to such
individual or HUF having business income.The condition listed at (iva) above,
means that the individual or HUF opting for taxation under the newly inserted
section 115BACof the Act shall not be entitled to the following
exemptions/deductions:
(i)Leave travel concession as contained in
clause (5) of section 10;
(ii)House rent allowance as contained in
clause (13A) of section 10;
(iii)Some of the allowance as contained in
clause (14) of section 10;
(iv)Allowances to MPs/MLAs as contained in
clause (17) of section 10;
(v)Allowance for income of minor as
contained in clause (32) of section 10;
(vi) Exemption for SEZ unit contained in
section 10AA;
(vii) Standard deduction, deduction for
entertainment allowance and employment/professional tax as contained in section
16;
(viii)Interest under section 24 in respect
of self-occupied or vacant property referred to in sub-section (2) of section
23. (Loss under the head income from house property for rented house shall not
be allowed to be set off under any other head and would be allowed to be
carried forward as per extant law);
(ix)Additional deprecation under clause
(iia) of sub-section (1) of section 32;(x)Deductions under section 32AD, 33AB,
33ABA;
(xi)Various deduction for donation for or expenditure
on scientific research contained in sub-clause (ii) or sub-clause (iia) or
sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35;
(xii)Deduction under section 35AD or
section 35CCC;
(xiii)Deduction from family pension under clause
(iia) of section 57;(xiv)
Any deduction under chapter VIA (like
section 80C, 80CCC, 80CCD, 80D, 80DD,80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG,
80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc).
However, deduction under sub-section (2) of
section 80CCD (employer contribution on account of employee in notified pension
scheme) and section 80JJAA (for new employment) can be claimed.
As many allowances have been provided
through notification of rules, it is proposed to carry out amendment of the
Income-tax Rules, 1962 (the Rules) subsequently, so as to allow only following
allowances notified under section 10(14) of the Act to the Individual or HUF
exercising option under the proposed section:(a)Transport Allowance granted to
a divvyang employee to meet expenditure for the purpose of commuting between
place of residence and place of duty
(b)Conveyance Allowance granted to meet the
expenditure on conveyance in performance of duties of an office;
(c)Any Allowance granted to meet the cost
of travel on tour or on transfer;
(d)Daily Allowance to meet the ordinary
daily charges incurred by an employee on account of absence from his normal
place of duty.It is also proposed to amend rule 3 of the Rules subsequently, so
as to remove exemption in respect of free food and beverage through vouchers
provided to the employee, being the person exercising option under the proposed
section, by the employer.
9This amendment will take effect from 1st
April, 2021 and will, accordingly, apply in relation to the assessment year
2021-22 and subsequent assessment
years.[Clauses53, 57 & 58]C.
Modification of concessional tax schemes
for domestic companies under section 115BAA and 115BABTLAA inserted section
115BAA and section 115BAB in the Act to provide domestic companies an option to
be taxed at concessional tax rates provided they do not avail specified
deductions and incentives.
Some of the deductions prohibited are
deductions under any provisions of Chapter VI-A under the heading “C. Deduction
in respect of certain incomes” other than the provisions of section 80JJAA. It
is now proposed to amend the provisions of section 115BAA and section 115BAB to
not allow deduction under any provisions of Chapter VI-A other than section
80JJAAor section 80M, in case of domestic companies opting for taxation under
these sections.These amendments will take effect from 1st April, 2020 and will,
accordingly, apply in relation to the assessment year 2020-21 and subsequent
assessment years.[Clauses 51 & 52]D.
Withdrawal of exemption on certain
perquisites or allowances provided to Union Pubic Services Commission (UPSC)
Chairman and members and Chief Election Commissioner and Election Commissioners
Section 10 of the Act provides for exemption in respect of certain incomes and
activities under specific circumstances. Clause (45) thereof, inserted by the
Finance Act, 2011,
Provides that any allowance or perquisite
as may be notified by the Central Government, paid to the serving/ retired
Chairman or Members of UPSC shall not be included in computing their total
income and hence shall be exempt from income-tax. Further, vide Notification
No. 49/2011 dated 6th September, 2011 bearing SO 2045(E), it was notified that
in the case of serving Chairman and members of UPSC the following allowances
and perquisites shall be exempt from income-tax for the purposes of clause (45)
of section 10 of the Act, with effect from 1st April, 2008
:
(i)the value of rent-free official
residence;
(ii)the value of conveyance facilities
including transport allowance;
(iii)the sumptuary allowance;
(iv)the value of leave travel concession
provided toa serving Chairman or member ofthe UPSC and members of his family.
