04/06/2020
TDS
Interest Related Changes
Note: In Ordinance 2020 it has been provided that Where any due date for payment of any amount towards tax or levy, by whatever name called, which falls during the period from the 20th day of March, 2020 to the 29th day of June, 2020 and such amount has not been paid within such date, but has been paid on or before the 30th day of June, 2020, then, notwithstanding anything contained in the specified Act,-
The reduced rate of interest of 0.75% for every month or part thereof will be charged for the period of delay.
If payment will be made after 30th June 2020 then normal provisions of act will apply.
Tax calculation for A.Y. 2021-22 in Form 24Q -> Salary Details.
The Budget 2020-21 has introduced some changes in the Income tax Rules and has introduced new optional tax regime. From 1st April 2020 these Changes will come in to effect and those who opt for new optional tax regime will have to forego certain deductions and exemptions.
Important Note:- From 1st April 2020 an employee will gets an option to choose between new tax regime and old tax regime. Employee will have to give declaration to the employer regarding the option choose. An individual employee who forgets to select any option will be taxed as per the old regime (as stated in the Union Budget 2020-21)
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New Tax Regime
Slab Rates for all the employees who opt for new and reduced tax regime will be as follows:-
Income
Rate of Tax
Up to Rs 2,50,000
Nil
From Rs 2,50,001 to Rs 5,00,000
5%
From Rs 5,00,001 to Rs 7,50,000
10%
From 7,50,001 to Rs 10,00,000
15%
From Rs 10,00,001 to Rs 12,50,000
20%
From Rs 12,50,001 to Rs 15,00,000
25%
Exceeding Rs 15,00,000
30%
Note:
-Health and Education Cess will be 4% of total tax payable.
-Surcharge will be as follows:-
Total Income exceeding Rs 50 lac but not exceeding 1 crore @ 10%.
Total Income exceeding Rs 1 crore but not exceeding 2 crore @ 15%
Total Income exceeding Rs 2 crore but not exceeding 5 crore @ 25%
Total Income exceeding Rs 5 crore @ 37%
-Section 87A: Rebate of Rs 12500 or tax whichever is lower for individual resident whose total income does not exceed Rs 500000
As stated in the Budget 2020-21 that those who opt for new tax regime will have to forego certain deductions and exemptions. So, the total income of the Individual employee who opts for new tax regime shall be computed without providing the following exemptions/deductions:-
1. Leave Travel Allowance under Section 10(5).
2. House Rent Allowance under Section 10(13A).
3. Special Allowance or benefit for the performance of duties of employment u/s 10(14)
4. Exemption under section 10AA of the IT Act.
5. Daily allowances to MPs/MLAs under section 10(17).
6. Deduction under chapter VIA Section like 80C, 80CCD(1B), 80D, 80U etc. [Except 80CCD(2)].
7. Standard deduction of Rs 50,000 u/s 16.
8. Deductions from House Property Income of interest paid on house loan (Self occupied/Vacant) u/s 24 will not be available.
9. Entertainment allowance and employment/ professional tax will not be available.
10. House property loss will not be allowed to be set of from other head of income.
However, following is a list of exemptions and deductions that are still available to employee under new tax regime:-
1. Deduction under section 80CCD(2) i.e. employer’s contribution towards NPS will be available.
2. Employer’s Contribution towards NPS, EPF or Superannuation fund will still remain exempt upto Rs 7.5 lac and any amount in excess of it will be taxable in employee’s hand.
3. Amount received on Leave Encashment will remain exempt.
4. Amount received on Voluntary Retirement Scheme will remain exempt up to Rs 5,00,000.
5. Interest accrued and maturity amount received from PPF will be exempt
Important Note: If an individual fails to satisfy the conditions mentioned in the new tax regime, then their option will be considered as invalid and tax will be calculated as if the option has never been opted for the assessment year relevant to the previous year.
·
Show Comparative Computation option is given at the time of Compuation to display both Computation as per Old Tax Regime and New Tax Regime.
ØReduction in rate of Tax Deduction at Source (TDS) & Tax Collection of Source (TCS) by 25% for payment/receipts
for the period from 14th May, 2020 to 31st March, 2021.
