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News INCOME TAX

  • Jun 29, 2020
  • Good news for taxpayers! CBDT exempts certain allowances in New Tax Regime

    The Union Budget 2020 had introduced a new income tax regime under Section 115BAC of the Income Tax Act, giving an option to individual taxpayers and Hindu Undivided Families (HUFs) to pay income tax at lower rates. The new system is applicable for income earned between April 1, 2020 and March 31, 2021 (FY 2020-21), which relates to AY 2021-22.
    Now, in a bid to give further relief to taxpayaers, the CBDT has amended Rule 2BB, notifying that a salaried employee who opts for the new income tax regime can claim certain exempt allowances.

    It may be noted that Section 115BAC(2) of the Income Tax Act prescribes the list of deductions /exemptions which are not available for deduction while computing total income if a taxpayer opts for the concessional tax regime. However, the provision empowers the CBDT to prescribe certain exemptions available under Section 10 which can be availed by the employees.