ECONOMY
NEW FINANCIAL YEAR
From today, these 5 new Income tax rules come into effect
- Team PT
From today, these 5 new Income tax rules come into effect



The new financial year 2020-21 is starting from today (April 1). In view of the lockdown to check the spread of corornavirus, the government had earlier extended the deadline for filing income tax returns for 2018-19 as well as that for linking PAN with Aadhaar by three months to June 30. Here are some changes in income tax rules that will come into effect from April 1, 2020, as announced in Budget 2020:

1) New tax slabs, as announced in Budget 2020, will come into effect. However, the old tax slabs will also remain in effect, giving a choice to the individual to opt between the two.

Under the new tax rates announced in Budget, there is zero tax for income up to Rs.  2.5 lakh; 5% for income between Rs. 2.5 lakh and up to Rs. 5 lakh; 10% for income between Rs. 5 lakh and up to Rs. 7.5 lakh; 15% for income between Rs. 7.5 lakh and up to Rs. 10 lakh; 20% for income between Rs. 10 lakh and up to Rs. 12.5 lakh; 25% for income between Rs. 12.5 lakh and up to Rs. 15 lakh; 30% for income above Rs. 15 lakh.

But under this new lower tax rates, the individual will have to give up on a lot of deductions that could help reduce taxable income like standard deduction, the popular deductions under Section 80C, exemptions on house rent allowance, leave travel allowance (LTA) and the deduction on interest paid on home loans. Tax experts say whether an individual should choose the new tax regime or the old one depends on a case to case basis.

"The alternative tax regime will benefit relatively the young taxpayers as they would not be committed much to expenditures like insurance, tuition fees of children, etc. The same could also be said for senior citizen taxpayers as well. Availability of NPS deduction under both the options will certainly continue to give it a boost. The relief to startups for deferment of tax on ESOPs will certainly help ease cash flow issues for their employees on receipt of ESOP," said Sandeep Sehgal, director of tax and regulatory at Ashok Maheshwary & Associates LLP.

2) Dividends received from mutual funds and domestic companies will be taxable at the recipients hands. For example, dividends the recipients will earn from their mutual fund investments will be taxed at their slab rates. Earlier, the dividend was tax-free in the recipients hands but the mutual funds deducted a dividend distribution tax (DDT) at a rate of 11.2% for equity-oriented funds and 29.12% for debt-oriented funds.

The new tax regime from April 1 increases the tax burden on investors in higher tax brackets, while lowering it for people in low tax brackets. However, it is to be noted that TDS or tax deduction at source at the rate of 10% will be levied if the dividend received by an investor in a financial year exceeds Rs. 5,000.

3) If the employer's contribution exceeding Rs. 7.5 lakh in a year towards NPS, superannuation fund and EPF, it will taxable in the hands of the employee. This change in income tax rule will be applicable in both the old and new tax regime.

It should be noted that if an individual opts for the new tax slabs, he can still claim income tax deduction on employer contribution towards employee’s NPS account. If your employer is contributing towards your NPS account, a deduction of up to 10% of salary (basic + DA) irrespective of any limit qualifies for income tax deduction under Section 80 CCD(2). Central government employees enjoy a higher limit of 14% of the salary. For others, the limit is 10%.

4) For those who are buying house for the first time and if the value is up to Rs. 45 lakh, the government has extended the date for availing additional tax benefit by a year to March 31,2021. House owners who have taken loans to purchase homes up to Rs. 45 lakh will be eligible to claim an additional tax deduction of Rs. 1.5 lakh on interest in addition to the existing deduction of Rs. 2 lakh.

Earlier, this deduction was allowed on housing loans sanctioned on or before March 31, 2020.

5) In a relief to employees of startups, the new tax regime from April 1 allows deferment of tax payment on shares allotted to them under ESOPs or employee stock ownership plan. The new tax regime, from April 1, has deferred the tax payment from the exercise date to 48 months after exercise, cessation of employment or sale of shares, whichever is earliest.

Currently, ESOPs are taxable when the vested options are exercised by the employees.

---------------
Watch video:
 


Disclaimer : PunjabToday.in and other platforms of the Punjab Today group strive to include views and opinions from across the entire spectrum, but by no means do we agree with everything we publish. Our efforts and editorial choices consistently underscore our authors' right to the freedom of speech. However, it should be clear to all readers that individual authors are responsible for the information, ideas or opinions in their articles, and very often, these do not reflect the views of PunjabToday.in or other platforms of the group. Punjab Today does not assume any responsibility or liability for the views of authors whose work appears here.

_______________________________________________________________

Most shared Punjab Today articles:

 

Amarinder govt’s nefarious plan to steal Shamlat Lands will spell death knell of Punjab

KYUN KE HUM HAIN HINDUSTANI

Three Women of 1984

 FROM 1984 TO BARGARI - Hurt & angry, we’ve tried rage, anger. Did we miss karuna?   

REVISITING 1984 – RIOT AROUND A POLE     

KARTARPUR SAHIB: A CLARION CALL FOR PEACE IN AN AGE OF CYNICISM

If it could happen to Arun Shourie, imagine what could they do to you?

Healers & Predators – The Doctor is In, & is very corrupt

Amarinder, Badals, AAP — Every party in Punjab is now an Akali Dal

Welcome to 1947. Happy Independence Day. Would you like to step out?

In Pakistan, a donkey pays for democracy – bleeding, its nostrils ripped apart

WOOING THE PANTH: Amarinder a little less Congressy, Akali Dal a little more saffron

"Captain Amarinder Singh ji” and "Rahul”: Reading Sign Language In A Relationship

The Comrade In Punjab - Lost, Irrelevant, Asleep, Even Bored!

WATERS ROYALTY - The Loot that Rajasthan Committed

AMARINDER GOVT's LOVE FOR FARMERS, AND MY DAD's FOR HIS SCOOTER

OF SUNNY KID & HORSE SENSE: The Punjab-Punjab Ties  

TRUDEAU VISIT AND RIGHT-WING MEDIA MACHINE         

 OF NIRMAL SINGH'S EYES 

Mr. CHIEF MINISTER, PLEASE CALL OFF JANUARY 7 FUNCTION         

MR PRESIDENT, PLEASE TAKE BACK HIS GALLANTRY MEDAL       

A SAFFRON JOURNEY VIA CANADA

BAD, BAD WOMAN!

 


 

_______________________________________________________________

Punjab Today believes in serious, engaging, narrative journalism at a time when mainstream media houses seem to have given up on long-form writing and news television has blurred or altogether erased the lines between news and slapstick entertainment. We at Punjab Today believe that readers such as yourself appreciate cerebral journalism, and would like you to hold us against the best international industry standards. Brickbats are welcome even more than bouquets, though an occasional pat on the back is always encouraging. Good journalism can be a lifeline in these uncertain times worldwide. You can support us in myriad ways. To begin with, by spreading word about us and forwarding this reportage. Stay engaged.

— Team PT 







Comment by: Praveen Krishna

I'm doing this because I promised Mr Brandon Parker if I got my profits back I will recommend him to people in the world, if you have been seeing people testifying about Mr Brandon Parker don't doubt, he is 100% real, for the first time in my life when I invested $1000 with him I got paid $7500 from crypto trading within a month, thank you sir Mr Brandon Parker. I can't recommend you to someone who is not real, Mr Brandon Parker is real when it comes to trading don't doubt him, you can contact him to give him a try and also see for yourself.
Whatsapp: +1(520)775-0121 or Telegram: @trustcrypto
Email: bit.fxtrade@yahoo . com


I'm doing this because I promised Mr Brandon Parker if I got my profits back I will recommend him to people in the world, if you have been seeing people testifying about Mr Brandon Parker don't doubt, he is 100% real, for the first time in my life when I invested $1000 with him I got paid $7500 from crypto trading within a month, thank you sir Mr Brandon Parker. I can't recommend you to someone who is not real, Mr Brandon Parker is real when it comes to trading don't doubt him, you can contact him to give him a try and also see for yourself.
Whatsapp: +1(520)775-0121 or Telegram: @trustcrypto
Email: bit.fxtrade@yahoo . com


I'm doing this because I promised Mr Brandon Parker if I got my profits back I will recommend him to people in the world, if you have been seeing people testifying about Mr Brandon Parker don't doubt, he is 100% real, for the first time in my life when I invested $1000 with him I got paid $7500 from crypto trading within a month, thank you sir Mr Brandon Parker. I can't recommend you to someone who is not real, Mr Brandon Parker is real when it comes to trading don't doubt him, you can contact him to give him a try and also see for yourself.
Whatsapp: +1(520)775-0121 or Telegram: @trustcrypto
Email: bit.fxtrade@yahoo . com

reply


Comment

your name*

email address*

comments*
You may use these HTML tags:<p> <u> <i> <b> <strong> <del> <code> <hr> <em> <ul> <li> <ol> <span> <div>

verification code*
 







MOST VISITED
YOU MAY LIKE

TOPIC CLOUD

TAGS CLOUD

ARCHIVE



Copyright © 2016-2017







NEWS LETTER