Budget 2020

Rahish asked 2 years ago

What are the important benefits/exemptions withdrawn in budget 2020 by giving compensatory benefit in slab rate. In budget 2020, for FY 2020-21, slab rate are reduced but to use the reduced slab, we have to sacrifice some of exemptions . PLease provide list of exemptions withdrawn.

1 Answers
Jupiter Staff answered 2 years ago

Dear sir,
with reference to income tax slab rate for Financial year 2020-21, assessee is given a option to choose between old or new slab rate. slab rate if given below:-

Income Level
OLD Slab
New Slab

Upto 2.5 Lakh
NIL
NIL

2.5 Lakh to 5 lakh
5%
5%

5 Lakh to 7.5 Lakh
20%
10%

7.5 Lakh to 10 Lakh
20%
15%

10 Lakh to 12.5 Lakh
30%
20%

12.5 Lakh to 15 Lakh
30%
25%

above Rs. 15 Lakh
30%
30%

This option is given by inserting new section 115 BAC, but if assessee choose new slab which are appears to be beneficial then assessee have to forgo some of the exemptions which were allowed with old slab rate. List of exemptions withdrawn is given below:-

  • Leave travel concession as contained in clause (5) of section 10;
  • House rent allowance as contained in clause (13A) of section 10;
  • Some of the allowance as contained in clause (14) of section 10;
  • Allowances to MPs/MLAs as contained in clause (17) of section 10;
  • Allowance for income of minor as contained in clause (32) of section 10;
  • Exemption for SEZ unit contained in section 10AA;
  • Standard deduction, deduction for entertainment allowance and employment/professional tax as contained in section 16;
  • Interest under section 24 in respect of self-occupied or vacant property referred to in sub-section (2) of section 23. (Loss under the head income from house property for rented house shall not be allowed to be set off under any other head and would be allowed to be carried forward as per extant law);
  • Additional deprecation under clause (iia) of sub-section (1) of section 32;
  • Deductions under section 32AD, 33AB, 33ABA;
  • Various deduction for donation for or expenditure on scientific research contained in sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35;
  • Deduction under section 35AD or section 35CCC;
  • Deduction from family pension under clause (iia) of section 57;
  • Any deduction under chapter VIA (like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc). However, deduction under sub-section (2) of section 80CCD (employer contribution on account of employee in notified pension scheme) and section 80JJAA (for new employment) can be claimed.
  • Set off of any loss,-carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in (a) above; or under the head house property with any other head of income; is not allowed.
  • As many allowances have  been  provided  through  notification  of  rules,  it  is  proposed  to  carry  out  amendment  of  the Income-tax Rules, 1962 (the Rules) subsequently, so as to allow only following allowances notified under section 10(14) of the Act to the Individual or HUF exercising option under the proposed section: (1) Transport Allowance granted to a divyang employee to meet expenditure for the purpose of commuting between place of residence and place of duty (2)Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office;
    (3)Any Allowance granted to meet the cost of travel on tour or on transfer;(4)Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty.

    But remember finance bill 2019 is yet to be passed, we may see some amendment in the finance bill before passing.

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