New tax regime under section 115BAC

The Finance Bill, 2020 (as passed by the Lok Sabha) makes the necessary amendments to section 115BAC to provide that taxpayers having income from profession shall also get only one time option to opt for concessional tax regime. The taxpayers earning business income or professional income are now at par as far as this provision is concerned.

Yes you may opt for it. But as of now, once you opt out, you'll not be able to opt in again until you do not have income from business or profession.

The Budget 2020 introduced a new regime under section 115BAC giving an option to individuals and HUFs to pay income tax at lower rates. From FY 2020-21, the assessee can choose to pay income tax under an optional new tax regime. Now the time for filing ITRs for Assessment Year 2021-22 is​​ approaching.

The new Section 115BAC of the Income-tax Act, 1961 provides that a person, being an individual or an undivided Hindu family (HUF) having income other than income from profession or business, may exercise the option concerning of a previous year to be taxed under the Section 115 BAC along with his/her return of income 

Originally posted by : debora M
	The new Section 115BAC of the Income-tax Act, 1961 provides that a person, being an individual or an undivided Hindu family (HUF) having income other than income from profession or business, may exercise the option concerning of a previous year to be taxed under the Section 115 BAC along with his/her return of income

Does not the income as fees from professional service fall under income from profession or business? Does not it mean that an individual who earns from fees from professional services will not be able to apply for new tax regime under section 115 BAC? Please clear the doubt.

Originally posted by : CMA Poornima Madhava
	Yes you may opt for it. But as of now, once you opt out, you'll not be able to opt in again until you do not have income from business or profession.

Does it mean once the individual who earns as fees from professional services opt for the new regime while filing IT return in current financial year cannot switch to the old regime when that individual filing IT return  in next financial year?

No no. If such individuals opt for new scheme say this year and opt for regular scheme next year. Then in this case, it is not possible to opt for new regime in the subsequent years.

But this is the current provision. I strongly feel that in subsequent years, this restriction might be removed. But can't be sure about it.

 

Poornima,

Thank you for the replies. Why is Debora M stating opposite of what you stated regarding whether individuals having income as fees from professional services can opt for new tax regime under section 115 BAC or not?

My reply is Yes, it can be opted for.

As to why the other person is having a different opinion, I can't comment on that.