From F.Y 2020-21, you can decide to pay income tax under an optional new tax regime. As per Income Tax Section 115 BAC, the new tax regime is allowable for people and HUFs. Poor tax slab has no deductions or exclusions is the key element. Arrangements of the new tax regime are secured under section 115BAC.
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What is fundamentally shrouded in this article? What is the NPTR (New Close to home Tax Regime) of taxation for F.Y 2020-21 and what are the tax rates under the new regime? What are the deductions and Exceptions not qualified under the new regime and late CBDT Warning dated 26 June 2020? How might I pick between the new tax regime and existing arrangements?
What is the NPTR (New Close to home Tax Regime) of taxation for F.Y 2020-21 and what are the tax rates under the new regime? The Financial plan 2020 presents a new regime under section 115BAC giving an option to people and HUF taxpayers to pay income tax at lower rates. The new framework is relevant for income earned from 1 April 2020 (F.Y 2020-21), which identifies with AY 2021-22.
The tax rates under the new tax regime and the current tax regime are:
What are the deductions and Exclusions not qualified under the new regime? You can’t guarantee the accompanying deductions/exclusions/set off under the new tax framework:
1) The standard derivation,
2) Proficient tax and amusement allowance on pay rates;
3) Leave Travel Allowance (LTA)
4) House Lease Allowance (HRA)
5) Minor kid income allowance Assistant allowance Kids instruction allowance Other unique allowances [Section10(14)]
6) Enthusiasm on lodging advance on oneself involved property or empty property (Section 24) Business deductions, business consumptions on determined organizations under the Income-tax Act.
7) Tax sparing speculations under Part VI-A conclusion (80C,80D, 80E, etc)
8) Without exclusion or finding for any different perquisites or allowances Conclusion from family annuity income
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What can be guaranteed?
1) Transport allowance for exceptionally able individuals.
2) Movement allowance to meet the transport consumption brought about as a major aspect of the work.
3) Conclusion for Informed Annuity Plan under section 80CCD(2)
4) Conclusion for the work of new representatives under section 80JJAA
Vide notice no. 38 dated 26 June 2020, CBDT has permitted certain exception by embeddings sub-rule 3 to administer 2BB
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This warning awards exclusion to the accompanying allowances:
1) Any allowance conceded to meet the expense of movement on visit or on move;
2) Any allowance, regardless of whether conceded on the visitor for the time of excursion regarding the exchange, to meet the common every day charges brought about by a representative by virtue of nonappearance from his typical spot of obligation;
3) Any allowance conceded to meet the use caused on movement in the exhibition of obligations of an office or work of benefit given that free transport isn’t given by the business;
4) Transport allowance conceded to a worker, who is visually impaired [or hard of hearing and dumb] or Orthopedically crippled with the handicap of lower furthest points, to meet his use to drive between the spot of his living arrangement and the spot of his obligation to the tune of Rs. 3200 every month.
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How might I pick between the new tax regime and existing arrangements?
A worker can pick the new tax regime toward the start of F.Y 2020-21 and cozy their manager. In the event that the Income comprises of any income aside from business or calling, at that point, the representative can pull back the option for any year other than the year for which it was worked out, which implies you can select in and quit for consistently.
On the off chance that you have decided on a new tax regime toward the beginning of the year, at that point it can’t be changed anytime during the money related year with the end goal of TDS, notwithstanding, the option can be changed at the hour of recording of Income-tax return.
In the event that the Income comprises of Business or calling and you settled on the new tax regime at that point, the option to pull back is accessible just a single time, after which you can never be qualified to practice the option again with the exception of when you stop to have income from Business or calling.
1) The most ideal option will rely upon many perspectives. Regardless of whether you have a current lodging advance whose the advantage you would not have any desire to leave, you have business deductions accessible, you have clinical and other tax deductions accessible with you which can be helpful.
2) What might be a tax advantage for other people, may not be for you as a person. It is prudent to counsel experts before standing firm.
3) These arrangements are accessible to Non-occupants.
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Feature of this Excel Utility:-
1) This Excel utility prepares and calculates your income tax as per the New Section 115 BAC (New and Old Tax Regime)
2) This Excel Utility has an option where you can choose your option as New or Old Tax Regime
3) This Excel Utility has a unique Salary Structure for Government and Non-Government Employee’s Salary Structure.
4) Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from the F.Y.2000-01 to F.Y.2020-21 (Update Version)
5) Automated Income Tax Revised Form 16 Part A&B for the F.Y.2020-21
6) Automated Income Tax Revised Form 16 Part B for the F.Y.2020-21
7) Individual Salary Sheet