INCOME TAX CBDT CLARIFYING Compiling the new Section 115BAC tax legislation implemented in the Budget 2020

CBDT CLARIFYING Compiling the new Section 115BAC tax legislation implemented in the Budget 2020

CBDT  CLARIFYING Compiling the new Section 115BAC tax legislation implemented in the Budget 2020

AMOUNT IS DEDUCTED OF TDS ON SALARY-DEDUCTION OF TDS ON SALARY-CBDT CIRCULAR CBDT CIRCULAR CLARIFYING THE PROCESS FOR DEDUCTION CLARIFYING THE METHOD FOR DEDUCTION IN THE EXISTING AND CURRENT SCHEMES OF TAXATION:

Income tax Amendment 2020 adopted a revised income tax system for individual taxpayers. The new tax scheme is offered to individuals under Section 115BAC of the Income Tax Act, 1961, in which individuals may opt for a lower tax rate and forfeit the deductions and exemptions otherwise available to them. The alternative, either to use another new scheme u / s 115BAC or to comply with the existing rules, is to be rendered at the time of filing the income tax return and there is no convincing requirement to announce its intention at the beginning of the year. However, towards the close of the year, but at the same time, the company is obliged to withhold tax (TDS) on a monthly basis. Such two factors cause uncertainty and difficulty on the part of the employer – whether to subtract tax at the regular rate or whether the employer is entitled to "press" and "allow" the employee decision statement. In that regard, the CBDT issued circular no. C1/2/2020 dated 13 April 2020 clarifying the same thing. The key aspects of the loop are as follows:

  1. The employee that, at the beginning of the year, makes a declaration about his decision to opt for a new scheme u / s 115BAC. If the employee has made a statement, he or she will not be permitted to amend it within the year (for the purposes of the TDS);
  2. If no declaration has been made in this respect by the employee, the employer shall deduct tax under the usual (old) provisions of the Act;
  3. The employee may make a final judgment on his or her right at the time of filing his or her tax return, regardless of the statement made to the employer (i.e. the employee may change his or her decision at the time of filing the report); and
  4. The company must take care of employees who also declare income from a business or a profession. In the second year, they are not allowed to deviate from the option as freely as other individuals can do. The Circular issued by CBDT is attached to your index.

Clarity of the alternative provided for in Section 115BAC of the Income Tax Act, 1961 Circular No. C1/2020:-13 April 2020: https://www.incometaxindia.gov.in/communications/circular/circular_c1_2020.pdf

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