TaxTMI 
TaxTMI 
New Rates of Tax on Individual & HUF Under Section 115BAC - A.Y. 2025-26 onwards
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....t. 5. From Rs. 16,00,001 to Rs. 20,00,000 20 per cent. 6. From Rs. 20,00,001 to Rs. 24,00,000 25 per cent. 7. Above Rs. 24,00,000 30 per cent. Condition specified under section 115BAC(2) For the purposes of sub-section (1A), the total income of the person referred to therein, shall be computed- (i) without any exemption or deduction under the provisions of Sub-section 2(i) - Under the head of salary Income * Section 10(5) - Leave Travel Concession * Section 10(13A) - House Rent Allowance * Section 10(14) - special allowances except following prescribed items: * Transport allowance granted to Divyang Employees * Conveyance Allowance * Any allowance to meet the cost of travel or on transfer * Allowance to meet the ordinarily daily charges incurred by employee * Section 10(17) - Allowances to MPs or MLAs * Section 16 clause (ii) or clause (iii) - entertainment allowance & professional tax * Allowed standard Deduction under clause (ia) from A.Y. 01.04.2024 Sub-section 2(i) - Income under the head House Property * interest under section 24(b) in respect of the property referred to in section 2....
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....vailable to such Unit subject to fulfilment of the conditions contained in the said section. (ii) without set off of any loss and other condition [ Sub section (2)(ii) or (3) ] Sub Section 2(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) of section 115BAC(2); (b) under the head "Income from house property" with any other head of income; Sub-section (3) - Treatment of Losses and Depreciation The loss and depreciation referred to in clause (ii) of sub-section (2) 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: * where there is a depreciation allowance in respect of a block of assets which has not been given full effect to prior to the assessment year beginning on the 1st day of April, 2021, corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2020 in the prescribed manner, if the option under sub-section (5) is exercised for a previous year r....
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.... for withdrawal, mirroring the procedural safeguards of sub-section (5). * The withdrawal of option under the proviso to of section 115BAC(6) shall also be in Form No. 10-IEA. [ Read with Rule 21AGA(2) ] Important Note 1. Computation of Tax Payable - * Special Income under section 111A, 112, 112A shall be taxable @ Special rates. * Other than Special Income taxable according slab rate specified under to section 115BAC(1A)(iii). * Tax Treatment of Agricultural Income - * Agricultural income is exempt under section 10(1), it is used for rate determination (a process known as partial integration) when: * The assessee has net agricultural income > Rs.5,000, and * Non-agricultural income (total income) exceeds the basic exemption limit. * How Tax Is Computed - Step-by-Step Analysis Step (i): Aggregate Income Tax - Aggregate total income and net agricultural income. Calculate tax on this aggregate using rates under Section 115BAC(1A). * You first add total income (taxable income) and net agricultural income. * Calculate income tax on this combined income using the new tax regime rates (i.e. slab rates under Sec....
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....otal Income Includes income of Capital Gains / Dividends? Surcharge Rate Rs.50 lakh - Rs.1 crore Yes 10% Rs.1 crore - Rs.2 crore Yes 15% > Rs.2 crore Excludes dividends & cap gains 25% > Rs.2 crore (only due to dividends/cap gains) Yes 15% 3. Marginal Relief - Marginal relief is also available while computing the tax liability under Section 115BAC(1A). 4. Health & Cess shall be 4% of income-tax and surcharge payable under section 115BAC. 5. Alternate Minimum Tax * Assessee opting for section 115BAC is not required to pay AMT. * Brought forward AMT credit cannot be set off against income u/s 115BAC. Therefore, if assessee has b/f AMT credit, it should first exhaust the AMT Credit and then thereafter opt for section 115BAC. Important Notifications & Circulars 1. CBDT clarification for TDS Amendment by the Finance Act, 2023 [ vide Circular No. 04 of 2023 Dated 05, April 2023 ] * New tax regime is the default tax regime applicable to all persons mentioned in section 115BAC(1A). * However, under section 115BAC(6) of the Act, a person may exercise an option to opt out of this tax regime. * A person not having i....