No change in Tax Rates. Surcharge and Cess to continue as existing.
However a new Section 115 BAC is being introduced whereby an individual and HUF can opt to pay tax as per new tax rates in case it forgo all exemptions and deductions which include deduction under section 80C of PF, LIP etc., standard deduction, LTC, House Rent Allowance, minor income exemption under section 10(32), interest deduction on Home loan under section 24(b) in respect of self occupied house, deduction under section 57(iia) of 1/3rd of Family Pension and also other deductions available under the act.
This option to be exercised while filing return in case of no one have business income. For others option is required while filing return for asstt year 2021-22 and once exercised it will be irreversible.
Income Tax Slab Rate for AY 2021-22 for Individuals:
|Net income range||Income-Tax rate|
|Up to Rs. 2,50,000||Nil|
|Rs. 2,50,000- Rs. 5,00,000||5%|
|Rs. 5,00,000- Rs. 750000||10%|
|Rs. 750,000 – Rs. 1000000||15%|
|Rs. 1000000- Rs. 1250000||20%|
|Rs. 1250000- Rs. 1500000||25%|
Dividend Distribution Tax:
- DDT being abolished wef 1.4.2020. Dividend now to be taxed as normal income in the hands of shareholder. Benefit of section 80M will be available to a company in respect of dividend income received by it and distributed by it.
No deduction of expenditure against dividend income will be allowed under section 57 except interest which will not exceed 20% of dividend income.
All Indian Citizens to be deemed resident of India if they are not resident of any other country. Such Indian Citizen shall be required to pay tax on global income.
Changes in Residential Status:
- For the purpose of determining residential status, the number of days for stay in India will be 120 days as against 182 days
For Resident but not ordinary resident
- Now test will be of non resident in 7 out of 10 preceding years as against present condition of 9 out of 10 preceding years
Exemption u/s 80 G:
- Charitable Trust Registration and 80 G exemption to be for 5 years. All existing trust to apply again.
- 80 G exemption holder to submit annual statement of donation received . Failure to submit such statement fee of Rs 200 per day for each day of default under section271G and penalty of Rs 10000 to Rs 1.00 lakh under new section 271J.
Vivad se Vishwash Scheme to reduce litigation.
Only tax amount to be paid . Full waiver of interest and penalty . In case of penalty and interest dispute which is not related to income only 25% of such interest and penalty to be paid.
In case payment is made after 31.3.2020 the amount to be paid is 110% of tax in dispute and 30% in case of penalty.
This will help all taxpayers having issues on penny stock. Share capital etc. to pay just tax and get out of the dispute. Scheme has not been out in public domain but in the Annexure to the budget speech some clarity is coming out. Apparently there is no rider and no exclusion. It should be applicable to all type of defaults and additions