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Recovery or Income Tax for the Financial Year 2020-21-Assessment Year 2021-22 - CIRCULAR

Recovery or Income  Tax for the Financial  Year 2020-21-Assessment  Year

2021-22  - regarding.

 From I  st  April 2020 onwards a new tax regime under section 115BAC is concurrently introduced  to   provide  for  a  concessional  rate  or  tax  on  the  total  income.     Hence  from Assessment  Year 2021-22  (Financial Year 2020-2021)  there are two operative tax  regimes  • One is the old tax regime where all the applicable deductions and exemptions are available and the tax  rates are as per the rates of tax specified in the  Finance Act, 2020.The second one is section  115BAC  which  is  a  new tax  regime  and claims of many specified  deductions  and exemptions have been omitted.   Section 115BAC()  or the Income Tax Act,  1961  provides an option for assessees to opt for the rates of Income  Tax applicable for Financial  Year 2020-21 (A Y 2021-2022)  either New Tax Regime or Old Tax Regime whichever is  beneficial  to them.

 The Rates of Income Tax for the FY 2020-21  (Ay 2021-22) are furnished  below:

Such  Officials  opting  for  the   New  Tax  Regime  will  have  to   forego  the  following Exemptions and Deductions:

 1.   The standard deduction,  professional  tax and entertainment allowance on salaries

2.    Leave Travel  Allowance (LTA)

3.    House Rent Allowance (HRA)

4.    Minor child income allowance

5.    I   lei per allowance

6.   Children education allowance

7.   Other special allowances I  Section I  0( 14)]

8.    Interest on housing loan on the self-occupied  property  or vacant property (Section 24)

9.    Chapter   VI-A  deduction  (80C,80D,   80E  and so on)  (Except  Section  



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