Saturday, December 5, 2020

Income Tax FY 2020-21 Slabs -for Salaried Employees. IT Circular 20/2020


 Income Tax FY 2020-21 AY 2021-22 Income Tax Act - Tab Slabs -for Salaried Employees

            Income Tax FY 2020-21 AY 2021-22 Income Tax Act - Tab Slabs -for Salaried Employees. Deduction of Tax at Source Income Tax Deduction from Salaries CBDT Circular for the Financial Year 2020-21 (Assessment Year 2021-22). Circular No 20/2020. The Present circular contains the rats of deduction of Income Tax from the payment of income chargeable under the head "Salaries" during the financial year 2020-21 and explains certain related provisions of the Act and Income Tax Act Rules 1962. 

Rates of  Income Tax 2020-21

Rates of Income Tax for Individuals whose age is less than 60 Years

Income slabs (Rs)

Rate of Tax

Where the total income does not exceed Rs 2,50,000

Nil

Where the Total income exceeds Rs 2,50,000 but does not exceed Rs 5,00,000

5 Percent of the amount by which the total income exceeds Rs 2,50,000

Where the Total Income exceeds Rs 5,00,000 but does not exceed Rs 10,00,000

Rs 12.500 plus 20 Per cent of the amount by which the total income exceeds Rs 5,00,000

Where the total income exceeds Rs 10,00,000

Rs 1,12,500 plus 30 percent of the amount by which the total income exceeds Rs 10,00,000

 

Rates of Income Tax for Senior Citizens (Age above Sixty years but less than 80 Years)

Income slabs (Rs)

Rate of Tax

Where the total income does not exceed Rs 3,00,000

Nil

Where the Total income exceeds Rs 3,00,000 but does not exceed Rs 5,00,000

5 Percent of the amount by which the total income exceeds Rs 3,00,000

Where the Total Income exceeds Rs 5,00,000 but does not exceed Rs 10,00,000

Rs 10,000 plus 20 Per cent of the amount by which the total income exceeds Rs 5,00,000

Where the total income exceeds Rs 10,00,000

Rs 1,10,000 plus 30 percent of the amount by which the total income exceeds Rs 10,00,000

Concessional Rates of Taxus 115BAC (New Tax Regime)

Section 115BAC of the Income tax Act, 1961, inserted by the Finance Act, 2020 w.e.f. Assessment Year 2021-22, an Individual may exercise option in respect of a previous year to be taxed under the said section 115BAC. In case of a person having income from business or profession, such person is required to exercise the option in prescribed manner on or before the due date specified under sub-section (1) of section 139 of the Act for any previous year relevant to assessment year commencing on or after 01.04.2021 and such option once exercised shall apply to subsequent assessment years. However, in case of such persons, the option once exercised can be withdrawn only once and such person shall never be eligible to exercise the option again unless such person ceases to have income from business or profession. In case of person having income from any other source apart from business and profession, such person is required to exercise the option in the prescribed manner along with the return of income to be furnished under section 139(1) of the Act for the previous year relevant to the assessment year. The concessional rates of tax provided under section 115BAC are subject to the condition that the total income shall be computed without specified exemptions or deductions, set off of loss and additional depreciation

The concessional rates of tax u's 115BAC are given in table below:

Income slabs (Rs)

NEW Tax Rate

Up to 2,50,000

Nil

2,50,001-5,00,000

5%

5,00,001 -7,50,000

10%

7,50,001 -10,00,000

15%

10,00,001- 12.50,000

20%

12.50,001 - 15,00,000 

25%

Above 15 lakh

30%

Major Changes in the Income Tax Act for 2020-21 FY

Major Amendments in Income Tax Act by Finance Act, 2020


Note: The compilation includes all the amendments made by the Finance Act 2020, under income tax Act relevant for the FY 2020-21, the amendments and insertions that are considered important in my opinion have been presented in detail whereas only the reference of sections has been given for other amendments.

Important Amendments at a glance:

Section 115BAC of the Income tax Act, 1961, inserted by the Finance Act, 2020 w.e.f. Assessment Year 2021-22, an Individual may exercise option in respect of a previous year to be taxed under New Regime or Old Tax Regime.  the option once exercised can be withdrawn only once and such person shall never be eligible to exercise the option again unless such person ceases to have income from business or profession

1) Rate of Income Tax
2) Sec 80 IAC- Rationalization of provisions of start-ups
3) Sec 80IBA – Deduction to Builders under Affordable Housing
4) Sec 80EEA- Deduction for interest on loan taken for House Property
5) Sec 43CA, 50C and 56- Increase in safe harbour limit of 5 per cent to 10 percent
6) Section 35 AD-Providing an option to the assessee for not availing deduction.
7) Sec 115A- Exempting non-resident from filing of Income-tax return in certain
8) Sec 192-Deferring TDS or tax payment in respect of income pertaining ESOP of start- ups.
9) Sec 194J- Reducing the rate of TDS on fees for technical services
11) Sec 206C- Widening the Scope of Sec 206C for TCS levy on certain other transaction
12) Section 17- Rationalization of tax treatment of employer’s contribution to RPF, superannuation funds and NPS.
13) Section 6- Modifications of Residency Provisions
14) Sec 194C- Amending definition of Works under Sec 194C
15) Sec 115O, 115R, 10,115UA, 115BBDA,Sec 57, 194,196A,196C,196D-Removing dividend distribution tax (DDT) and moving to classical system of taxing dividend in the hands of shareholders/unit holders.
16) Section 55- Rationalization of provisions to compute cost of acquisition.
17) Sec44 AB- Rationalization of provision related to Tax Audit
18) Sec 288-Amendment in the provisions of Act relating to verification of the return of income and appearance of authorized representative.
19) Rationalisation of provisions relating to trust, institution and funds.

Insertion of New Sections/ provisions:

  • 1) Sec 194-O- TDS on E commerce Transactions
  • 2) Penalty for Fake Invoice
  • 3) Sec 194K- TDS on income from Mutual Fund Units
  • 4) Section 80M- Inter corporate Dividends
  • 5) Sec 285BB- Form 26AS to provide multiple information

Download the Complete Income Tax Circular 2020-21FY

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