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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 from 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

6,50,000

28,600

-

-28,600

7,00,000

33,800

23,400

-10,400

7,50,000

39,000

33,800

-5,200

7,75,000

42,900

39,000

-3,900

7,90,000

45,240

42,120

-3,120

8,00,000

46,800

44,200

-2,600

8,50,000

54,600

54,600

-

9,00,000

62,400

65,000

2,600

9,10,000

63,960

67,080

3,120

9,20,000

65,520

69,160

3,640

9,25,000

66,300

70,200

3,900

9,50,000

70,200

75,400

5,200

10,00,000

78,000

85,800

7,800

The above table shows that it is beneficial to opt for the New Tax Regime of Section 115BAC if your Income is more than Rs.8,50,000 with your eligible Deduction under 80C.
The selection of New Tax Regime of Section 115BAC is not advisable up to your income Rs.8,50,000 in case the Assessee is eligible for Deduction under Section 80C.

Implications of this New Tax Regime of Section 115BAC in case of ‘Individuals’ or ‘HUFs’ not eligible for any Deduction from the 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 under Section 80C and 80D from 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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