Section 115BAC ITA 1961 (effective AY 2021-22 onwards) is the NEW TAX REGIME with:
Ano changes (cf. Income Tax Act 1961, Section 115BAC) (cf. Income Tax Act 1961, Section 115BAC) (cf. Income Tax Act 1961, Section 115BAC) (cf. Income Tax Act 1961, Section 115BAC)
Babolition of taxes (cf. Income Tax Act 1961, Section 115BAC) (cf. Income Tax Act 1961, Section 115BAC) (cf. Income Tax Act 1961, Section 115BAC) (cf. Income Tax Act 1961, Section 115BAC)
Chigher rates (cf. Income Tax Act 1961, Section 115BAC) (cf. Income Tax Act 1961, Section 115BAC) (cf. Income Tax Act 1961, Section 115BAC) (cf. Income Tax Act 1961, Section 115BAC)
DCONCESSIONAL TAX RATES with most exemptions/deductions FOREGONE; default regime from AY 2024-25; old regime available as option; Budget 2023 raised exemption to Rs 7 lakh (with rebate u/s 87A)
Answer & Solution
Correct answer: D. CONCESSIONAL TAX RATES with most exemptions/deductions FOREGONE; default regime from AY 2024-25; old regime available as option; Budget 2023 raised exemption to Rs 7 lakh (with rebate u/s 87A)
1. Section 115BAC Income Tax Act 1961 (effective AY 2021-22) introduced NEW TAX REGIME.
2. CONCESSIONAL RATES (current after Budget 2024):
3. (a) Up to Rs 3 lakh: NIL;
4. (b) Rs 3-7 lakh: 5%;
5. (c) Rs 7-10 lakh: 10%;
6. (d) Rs 10-12 lakh: 15%;
7. (e) Rs 12-15 lakh: 20%;
8. (f) Above Rs 15 lakh: 30%.
9. CONDITIONS for new regime:
10. (i) Most EXEMPTIONS and DEDUCTIONS FOREGONE (Section 80C, 80D, 80G, LTA, HRA, etc.);
11. (ii) Standard deduction of Rs 75,000 for salaried; Rs 25,000 for pensioners.
12. (iii) NPS employer contribution (80CCD(2)) still allowed;
13. (iv) Rebate under Section 87A: full rebate up to Rs 7 lakh (Rs 25,000 max).
14. From AY 2024-25, NEW REGIME is the DEFAULT (taxpayer must explicitly OPT FOR OLD REGIME).
15. Hence option B is correct.
_Source: CS Executive Paper 4 Tax Laws (ICSI BoS) + Income Tax Act 1961 + CGST Act 2017 — Income Tax Act 1961, Section 115BAC_
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