Question: Is New Tax Regime Mandatory?

Can we change tax regime every year?

Effectively, you can switch between new and old tax regime at the time of filing ITR.

CBDT also clarifies that even if one opts for New Tax Regime and the same intimation is made to employer or Deductor, it shall be only for the purposes of TDS during the previous year and cannot be modified during that year..

Is 80c removed in 2020?

[Budget 2020] Tax Rates Lowered But HRA, 80C, and INR 50,000 Standard Deduction Gone. In the Union Budget 2020, finance minister Nirmala Sitharaman proposed a new tax regime with lower tax rates for different income groups. … However, all without deductions.

What is the 80c limit for 2020 21?

The maximum deductions available under a few sections are as follows: Section 80C to 80CCC: ₹ 1,50,000. Section 80CCD: ₹ 50,000. Section 80D: ₹ 30,000 for self, spouse and children, ₹30,000 for parents, ₹50,000 for senior citizens.

Should I opt for new tax regime?

New taxation regime is better for employees with less salary and less investments resulting in lesser deductions and exemptions. … This could include non-salaried taxpayers (including consultants) who are not eligible for exemptions and deductions under Chapter VI-A.

Which deductions are allowed in new tax regime?

These include deductions under: section 80C for a maximum of Rs 1.5 lakh claimed by investing in specified financial products, section 80D for health insurance premium paid, 80TTA for deduction on savings account interest earned from a bank or post office etc.

Which regime is better for income tax?

Calculations show that salaried individuals claiming a large number of exemptions (80C, 80D, interest on housing loan, HRA and LTA etc.) are likely to be better off in the existing income tax regime.

Who will benefit from new tax regime?

70% of taxpayers will benefit from new income tax rates, slabs: Finance Ministry. Mumbai: The finance ministry expects at least 80 per cent of the taxpayers to move to the new income tax regime, Revenue Secretary Ajay Bhushan Pandey said on Friday.

How do I apply for a new tax regime?

If you wish to opt for the new tax regime, you will have to inform your employer through the declaration form. The employer will accordingly deduct tax at source (TDS). This declaration will be applicable for the entire financial year 2020-21.

How do I file taxes for new tax regime?

The Central Board of Direct Taxes (CBDT), via a notification dated October 1, 2020, has clarified that individuals opting for the new tax regime for FY 2020-21 will have to do so by filling and filing a new form, called Form 10-IE. The new form i.e. Form 10-IE has been notified by the government.

Is standard deduction allowed in new tax regime?

With three more tax slabs, the new tax regime has only added to the complication. … Anyone claiming tax exemptions and deductions of more than Rs 2.5 lakh in a year will not gain from the new structure. This threshold of Rs 2.5 lakh includes the standard deduction of Rs 50,000 for which no investment is required.

What is the new tax regime 2020?

Income tax slabs under the new tax regime for all individuals for FY 2020-21 (AY 2021-22)Income Tax SlabTax RateRs 5 lakh to Rs 7.5 lakh10%Rs 7.5 lakh to Rs 10 lakh15%Rs 10 lakh to Rs 12.5 lakh20%Rs 12.5 lakh to Rs 15 lakh25%3 more rows•4 days ago

Is new tax regime better than old?

The pros of the new regime are as follows: Reduced tax rates and compliance: The new regime provides for concessional tax rates vis-à-vis tax rates in the existing or old regime. Further, as most of the exemptions and deductions are not available, the documentation required is lesser and tax filing is simpler.