Section 115BAC Income Tax Act : New Tax Regime in Income Tax
Section 115BAC Income Tax Act is also known as New Tax Regime under Income Tax. Here is the Complete information about this section. This article is written by CA satbir Singh (Contact us Taxheal@gmail.com )
Commentary on Section 115BAC Income Tax Act
- Section 115BAC Income Tax Act is Inserted by the Finance Act, 2020, w.e.f. 1-4-2021.
- Section 115BAC (1) of Income Tax is applicable from 01.04.2021 to 31.03.2024 . i.,e for AY 2021-22 to AY 2023-24
- Section 115BAC Income Tax Act is amended by Finance Act 2023 w.e.f 01.04.2024 (AY 2024-25 onwards) and inserted new section 115BAC(1A) in Income Tax Act w.e.f 01.04.2024 (AY 2024-25 onwards)
- Circular No. C1 of 2020 issued by CBDT , dated 13-4-2020 (Clarification in respect of option under section 115BAC) for FY 2020-21 to FY 2022-23
- New Circular 4/2023 issued by CBDT Dated 05-04-2023 Clarification regarding deduction of TDS from salary under New Tax Regime from FY 2023-24 (AY 2024-25 onwards)
- Refer relevant rule 21AG of Income Tax Rules
- Refer Form No. 10-IE.
- Refer Notes on Amendment in Section 115BAC below
Section 115BAC Income Tax Act
Tax on income of individuals and Hindu undivided family 1[and others]
115BAC. (1) Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, the income-tax payable in respect of the total income of a person, being an individual or a Hindu undivided family, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2021 2[ but before the 1st
day of April, 2024], shall, at the option of such person, be computed at the rate of tax given in the following Table, if the conditions contained in sub-section (2) are satisfied, namely:—
day of April, 2024], shall, at the option of such person, be computed at the rate of tax given in the following Table, if the conditions contained in sub-section (2) are satisfied, namely:—
TABLE
| Sl. No. | Total income | Rate of tax |
| (1) | (2) | (3) |
| 1. | Upto Rs. 2,50,000 | Nil |
| 2. | From Rs. 2,50,001 to Rs. 5,00,000 | 5 per cent |
| 3. | From Rs. 5,00,001 to Rs. 7,50,000 | 10 per cent |
| 4. | From Rs. 7,50,001 to Rs. 10,00,000 | 15 per cent |
| 5. | From Rs. 10,00,001 to Rs. 12,50,000 | 20 per cent |
| 6. | From Rs. 12,50,001 to Rs. 15,00,000 | 25 per cent |
| 7. | Above Rs. 15,00,000 | 30 per cent: |
Provided that where the person fails to satisfy the conditions contained in sub-section (2) in any previous year, the option shall become invalid in respect of the assessment year relevant to that previous year and other provisions of this Act shall apply, as if the option had not been exercised for the assessment year relevant to that previous year:
Provided further that where the option is exercised under clause (i) of sub-section (5), in the event of failure to satisfy the conditions contained in sub-section (2), it shall become invalid for subsequent assessment years also and other provisions of this Act shall apply for those years accordingly.
3 (1A) Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, the income-tax payable in respect of the total income of a person, being an individual or Hindu undivided family or association of persons (other than a co-operative society), or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2, other than a person who has exercised an option under sub-section (6), for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2024, shall be computed at the rate of tax given in the following Table, namely:—
| Sl. No. | Total income | Rate of tax |
| (1) | (2) | (3) |
| 1. | Upto Rs. 3,00,000 | Nil |
| 2. | From Rs. 3,0,001 to Rs. 6,00,000 | 5 per cent |
| 3. | From Rs. 6,00,001 to Rs. 9,00,000 | 10 per cent |
| 4. | From Rs. 9,00,001 to Rs. 12,00,000 | 15 per cent |
| 5. | From Rs. 12,00,001 to Rs. 15,00,000 | 20 per cent |
| 6. | Above Rs. 15,00,000 | 30 per cent: |
4 [(2) For the purposes of sub-section (1A), the total income of the person referred to therein, shall be computed—
| (i) | without any exemption or deduction under the provisions of clause (5) or clause (13A) or prescribed under clause (14) (other than those as may be prescribed for this purpose) or clause (17) or clause (32), of section 10 or section 10AA or clause (ii) or clause (iii) of section 16 or clause (b) of section 24 [in respect of the property referred to in sub-section (2) of section 23] or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or under any of the provisions of Chapter VI-A other than the provisions of sub-section (2) of section 80CCD or sub-section (2) of section 80CCH or section 80JJAA;”;] | |
| (ii) | without set off of any loss,— |
| (a) | carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); | |
| (b) | under the head “Income from house property” with any other head of income; |
| (iii) | by claiming the depreciation, if any, under any provision of section 32, except clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed; and | |
| (iv) | without any exemption or deduction for allowances or perquisite, by whatever name called, provided under any other law for the time being in force. |
(3) The loss and depreciation referred to in clause (ii) of sub-section (2) shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year:
Provided that where there is a depreciation allowance in respect of a block of assets which has not been given full effect to prior to the assessment year beginning on the 1st day of April, 2021, corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2020 in the prescribed manner, if the option under sub-section (5) is exercised for a previous year relevant to the assessment year beginning on the 1st day of April, 2021.
5 [ “Provided further that in a case where,—
(i) the assessee has not exercised the option under sub-section (5) for any previous year relevant to the assessment
year beginning on or before the 1st day of April, 2023;
(ii) the income-tax on the total income of the assessee is computed under sub-section (1A); and
(iii) there is a depreciation allowance in respect of a block of assets which has not been given full effect prior to the assessment year beginning on the 1st day of April, 2024,
(i) the assessee has not exercised the option under sub-section (5) for any previous year relevant to the assessment
year beginning on or before the 1st day of April, 2023;
(ii) the income-tax on the total income of the assessee is computed under sub-section (1A); and
(iii) there is a depreciation allowance in respect of a block of assets which has not been given full effect prior to the assessment year beginning on the 1st day of April, 2024,
corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2023 in the manner as may be prescribed.”;]
6[ (4) In case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA,—
(i) who has exercised option under sub-section (5) for any previous year relevant to the assessment year beginning on or
after the 1st day of April, 2021 but before the 1st day of April, 2024;
(ii) whose total income is computed under sub-section (1A), the conditions contained in sub-section (2) shall be modified to the extent that the deduction under section 80LA shall be available to such Unit subject to fulfilment of the conditions contained in the said section.
Explanation.—For the purposes of this sub-section, the term “Unit” shall have the meaning assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005.’;]
(i) who has exercised option under sub-section (5) for any previous year relevant to the assessment year beginning on or
after the 1st day of April, 2021 but before the 1st day of April, 2024;
(ii) whose total income is computed under sub-section (1A), the conditions contained in sub-section (2) shall be modified to the extent that the deduction under section 80LA shall be available to such Unit subject to fulfilment of the conditions contained in the said section.
Explanation.—For the purposes of this sub-section, the term “Unit” shall have the meaning assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005.’;]
(5) Nothing contained in this section shall apply unless option is exercised in the prescribed manner by the person,—
Provided that the option under clause (i), once exercised for any previous year can be withdrawn only once for a previous year other than the year in which it was exercised and thereafter, the person shall never be eligible to exercise option under this section, except where such person ceases to have any income from business or profession in which case, option under clause (ii) shall be available.
7[ “Provided further that the provisions of this sub-section shall not apply for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2024.”]
8 [“(6) Nothing contained in sub-section (1A) shall apply to a person where an option is exercised by such person, in the manner as may be prescribed, for any assessment year, and such option is exercised,—
(i) on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for such
assessment year, in case of a person having income from business or profession, and such option once exercised shall apply to subsequent assessment years; or
(ii) along with the return of income to be furnished under sub-section (1) of section 139 for such assessment year, in case of a person not having income referred to in clause (i):
Provided that the option under clause (i), once exercised for any previous year can be withdrawn only once for a previous year other than the year in which it was exercised and thereafter, the person shall never be eligible to exercise the option under this sub-section, except where such person ceases to have any income from business or profession in which case, option under clause (ii) shall be available.”.]
(i) on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for such
assessment year, in case of a person having income from business or profession, and such option once exercised shall apply to subsequent assessment years; or
(ii) along with the return of income to be furnished under sub-section (1) of section 139 for such assessment year, in case of a person not having income referred to in clause (i):
Provided that the option under clause (i), once exercised for any previous year can be withdrawn only once for a previous year other than the year in which it was exercised and thereafter, the person shall never be eligible to exercise the option under this sub-section, except where such person ceases to have any income from business or profession in which case, option under clause (ii) shall be available.”.]
Notes on Amendment in Section 115BAC of Income tax act
1.words “and others” inserted in heading of Section 115BAC by Finance Act 2023 w.e.f 01.04.2024
2. words “but before the 1st day of April, 2024” inserted by Finance Act 2023 w.e.f 01.04.2024
3. Inserted by Finance Act 2023 w.e.f 01.04.2024
4 substituted for the following by Finance Act 2023 w.e.f 01.04.2024
(2) For the purposes of sub-section (1), the total income of the individual or Hindu undivided family shall be computed,—
| (i) | without any exemption or deduction under the provisions of clause (5) or clause (13A) or prescribed under clause (14) (other than those as may be prescribed for this purpose) or clause (17) or clause (32), of section 10 or section 10AA or section 16 or clause (b) of section 24 (in respect of the property referred to in sub-section (2) of section 23) or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or clause (iia) of section 57 or under any of the provisions of Chapter VI-A other than the provisions of sub-section (2) of section 80CCD or 9[sub-section (2) of section 80CCH or] section 80JJAA; |
5. Inserted by Finance Act 2023 w.e.f 01.04.2024
6.substituted for the following by Finance Act 2023 w.e.f 01.04.2024
(4) In case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA, which has exercised option under sub-section (5), the conditions contained in sub-section (2) shall be modified to the extent that the deduction under section 80LA shall be available to such Unit subject to fulfilment of the conditions contained in the said section.
Explanation.—For the purposes of this sub-section, the term “Unit” shall have the meaning assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).
7. Inserted by Finance Act 2023 w.e.f 01.04.2024
8. Inserted by Finance Act 2023 w.e.f 01.04.2024
9 Inserted by Finance Act 2023 w.e.f 01.04.2023
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