- Calling of option for new personal taxation regime of reduced tax rates with no exemptions or deductions or setoff of loss etc. in case of individuals & HUFs as provided u/s 115 BAC of the IT Act, 1961 (applicable w.e.f. AY 2021-22) – reg.
No. 1001-22/2018-19/Taxation/BSNL/3777
Dated:.20.04.2020
To
The Chief General Managers/IFAs, All BSNL
All PGMs/Sr.GMs /GMs, BSNL,
All PGMs/Sr.GMs /GMs, BSNL,
Sub.:- Calling of option for new personal taxation regime of reduced tax rates with no exemptions or deductions or setoff of loss etc. in case of individuals & HUFs as provided u/s 115 BAC of the IT Act, 1961 (applicable w.e.f. AY 2021-22) – reg.
Ref.:-1. Finance Act 2020 (12 of 2020) dated 27.03.2020
Kindly refer to section 115 BAC of the Income Tax Act, 1961, inserted by the Finance Act, 2020 (relevant pages of the Gazette of India are enclosed for ready reference as Annexure 1), w.e.f. AY 2021-22, which, inter alia, provides that a person, being an individual or a Hindu Undivided Family (HUF) having income other than income from business or profession may exercise option in respect of a previous year to be taxed under the said section 115 BAC alongwith his return of income to be furnished under sub-section (1) of section 139 of the Act for each year. The concessional rate provided under section 115 BAC of the Act (Para A) is subject to the condition that the total income shall be computed without specified exemption or deduction, setoff of loss as provided in the Act (Para B).
A. New Personal Tax Slabs
The optional newly inserted reduced personal tax rates in the case of individuals & HUFs u/s 115BAC, in the Finance Act 2020, applicable w.e.f. AY 2021-22, corresponding to the existing tax rate are as under:-
| Total Income (Rs) | New Regime Tax Rate (%)- without exemptions/ deductions etc. | Old/Existing Regime Tax Rate (%)- with exemptions/ deductions etc. |
| Up to 2,50,000 | Nil | Nil |
| From 2,50,001 to 5,00,000 | 5 | 5 |
| From 5,00,001 to 7,50,000 | 10 | 20 |
| From 7,50,001 to 10,00,000 | 15 | 20 |
| From 10,00,001 to 12,50,000 | 20 | 30 |
| From 12,50,001 to 15,00,000 | 25 | 30 |
| Above 15,00,000 | 30 | 30 |
Surcharge and cess shall continue to be levied at the existing rates.
B. The total income of the individual or Hindu undivided family shall be computed,—
(i) 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 the property referred to in sub-section (2) of section 23) or clause (iia) of section 57 or under any of the provisions of Chapter VI-A other than the provisions of sub-section (2) of section 80CCD or section 80JJAA;
(ii) without set off of any loss,—
(a) carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i);
(b) under the head “Income from house property” with any other head of income;
(iii) without any exemption or deduction for allowances or perquisite, by whatever name called, provided under any other law for the time being in
Basis above, in the new personal taxation regime, the ‘assessees’ have been given an option to either continue with the existing personal tax rates with availment of full specified exemptions or deductions, or to opt for the new tax regime of reduced personal tax rates with restrictions on specified exemptions or deductions, currently available to them under different chapters and sections of the Act.
2. For the purpose o f TDS from Salary, emploee has to choose his/ her tax regime.
CBDT vide Circular dated April 13, 2020 under reference (2) above, has issued clarification in respect of option under Section 115 BAC of the Income Tax Act,1961 (Copy enclosed as Annexure-2). The salient features and conditions for the employer to deduct TDS at lower rates under the new personal tax regime are as under:
(a) Based on above, it is clarified that if the employee (not having any income under the head “profits and gains of business or profession”) opts for the new personal tax regime and intimates such intention to BSNL for each previous year, upon receipt of such intimation, BSNL shall compute his total income and make TDS thereon in accordance with the provisions of section 115 BAC of the If such intimation is not made by the employee, then BSNL shall make TDS without considering the provisions of Section 115 BAC of the Act.
(b) It is further clarified that once the new tax regime under Section 115BAC is opted by an employee at any time during the financial year, then such option cannot be changed during that financial year/previous year as far as TDS by BSNL is However, the option can be changed by the employee at the time of filing of return of income under sub-section (1) of section 139 of the Act for that previous year.
(c) Further, in case of an eployee joining BSNL at any time during the current financial year, the employee shall be required to submit the same declaration as provided to the erstwhile employer, along-with the details of income earned from previous employer and TDS deducted as on date. Where the employee has not made any declaration to the previous employer, the employee can intimate the intention to BSNL to be covered under the new personal tax regime (along-with the details of income earned from previous employer and TDS deducted as on date).
3.In view of above, it is intimated that, if any employee opts for new personal tax regime as provided under section 115 BAC of Income Tax Act, 1961, he/she is required to furnish his option/declaration by 28th April, 2020 to the concerned DDOs/ AO (Pay/HCM/Cash). Further, the employee opting for the new personal tax regime shall also confirm and certify that he / she does not have any income under the head “profits and gains of business or profession” and the declaration has been given to BSNL only for the purpose of deduction of TDS at reduced tax rates as given under section 115BAC of the IT Act, 1961.
The instructions may be circulated amongst all field formations for their information, guidance and necessary action.
This issues with the approval of Sr. GM (Taxation), C.O, BSNL.
Encl.:- As above (Annexure-1, Annexure-2).
(Subjrat Kumar Mohakud)
AGM (Taxation)
C.O., BSNL
AGM (Taxation)
C.O., BSNL
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