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Implications of this New Tax Regime of Section 115BAC in case of ‘Individuals’ or ‘HUFs’ if eligible for Deduction under Section 80C, 80D and Standard Deduction U/s 16 from the Assessment Year 2021-22

The Finance minister in her budget speech highlighted that  tax burden on a person earning Rs. 15 lakhs shall be reduced by  Rs. 78,000. However, this situation will rarely arise as a tax saving  of Rs. 78,000 arises only when the assessee has not been availing any exemption or deduction in the current regime. We have  analysed the following situation to understand the implications  of this New Tax Regime of Section 115BAC:

Income

Tax Liability under New Tax Regime of Section 115BAC

Tax Liability under Old Tax Regime

Net Tax
Saving

6,00,000

23,400

-

-23,400

7,00,000

33,800

-

-33,800

8,00,000

46,800

23,400

-23,400

9,00,000

62,400

44,200

-18,200

10,00,000

78,000

65,000

-13,000

11,00,000

98,800

85,800

-13,000

12,00,000

1,19,600

1,06,600

-13,000

13,00,000

1,43,000

1,32,600

-10,400

14,00,000

1,69,000

1,63,800

-5,200

15,00,000

1,95,000

1,95,000

-

16,00,000

2,26,200

2,26,200

-

17,00,000

2,57,400

2,57,400

-

18,00,000

2,88,600

2,88,600

-

It is NOT advisable to opt New Tax Regime of Section 115BAC if the Assessee is eligible for Deduction U/s 80C and 80D (it has been assumed that Deduction of Rs.50,000 shall be Claimed under Section 80D) and Standard Deduction U/s 16 from the Assessment Year 2021-22

Implications of this New Tax Regime of Section 115BAC in case of ‘Individuals’ or ‘HUFs’ if eligible for Deduction under Section 80C and 80D from Assessment Year 2021-22 Tax Amendments in Finance Bill 2020 Implications of this New Tax Regime of Section 115BAC in case of ‘Individuals’ or ‘HUFs’ if eligible for Deduction U/s 80C , 80D , Standard Deduction U/s 16 and Deduction for Interest on Housing Loan U/s 24(b) from the Assessment Year 2021-22
Income Tax Slab for Financial Year 2020-21 (AY : 2021-22)



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Tax Amendments in Finance Bill 2020

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