What is Section 115BAC?

People who choose the new tax system need to be aware of Section 115BAC of income tax act, 1961. Budget 2020 included the introduction of Section 115BAC, which went into effect with the fiscal year (AY) 2020–21. The new tax structure is referred to as Section 115BAC.

What is Section 115BAC income tax?

The new Section 115BAC of the Income-tax Act, 1961 allows any person, whether an individual or an undivided Hindu family (HUF), who has income other than income from a profession or business, to exercise the option regarding a prior year to be taxed under Section 115 BAC along with his or her return of income to be furnished under Section 139(1) of the Income-tax Act for each year.

When using the concessional rate provided by Section 115BAC of the Income Tax Act, it is necessary to compute the total income without taking into account any specific exemptions or deductions, as well as any loss and additional depreciation offsets.

Who is Eligible for Section 115BAC?

When the conditions listed below are met, HUFs and individuals can choose to pay income tax at the new income tax slab rates on their total income for the precise fiscal year;

• The declared income should not cover any of the business income.

• The calculation of it is done without any deductions or exemptions given under the following:

• Chapter VI-A except those under section 80CCD/ 80JJAA

• Section 24b

• Clause (5)/(13A)/(14)/(17)/(32) of Section 10/10AA/16

• Section 32(1)/ 32AD/ 33AB/ 33ABA

• Section 35/ 35AD/ 35CCC

• Clause (iia) of Section 57

• The calculation is performed without accounting for losses from prior AYs brought on by the aforementioned deductions or from homeowner-owned real estate.

• It is calculated without taking into account any exemptions or adjustments for benefits or compensation.

• The calculation is done without claiming any depreciation under clause (iia) of Section 32.

I hope now you have understood the meaning of section 115BAC of income tax act. I hope this helps:)

Read More: