Amendment of section 115BAC.
50. In section 115BAC of the Income-tax Act,––
(A) with effect from the 1st day of April, 2024,––
(a) in the marginal heading, for the words “and Hindu undivided family”, the words “, Hindu undivided family and others” shall be substituted;
(b) in sub-section (1), for the figures, letters and words “1st day of April, 2021”, the figures, letters and words “1st day of April, 2021 but before the 1st day of April, 2024” shall be substituted;
(c) after sub-section (1), the following sub-section shall be inserted, namely:––
“(1A) Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, the incometax payable in respect of the total income of a person, being an individual or Hindu undivided family or association of persons (other than a co-operative society), or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2, other than a person who has exercised an option under sub-section (6), for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2024, shall be computed at the rate of tax given in the following Table, namely:-
TABLE
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Sl. No.
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Total income
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Rate of tax
|
|
(1)
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(2)
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(3)
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1.
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Upto Rs.3,00,000
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Nil
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|
2.
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From Rs.3,00,001 to Rs.6,00,000
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5 per cent.
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|
3.
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From Rs.6,00,001 to Rs.9,00,000
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10 per cent.
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|
4.
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From Rs.9,00,001 to Rs.12,00,000
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15 per cent.
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5.
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From Rs.12,00,001 to Rs.15,00,000
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20 per cent.
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|
6.
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Above Rs.15,00,000
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30 per cent.”;
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(B) with effect from the 1st day of April, 2023, in sub-section (2), in clause (i), after the words, figures and letters “section 80CCD or”, the words, brackets, figures and letters “sub-section (2) of section 80CCH or” shall be inserted;
(C) with effect from the 1st day of April, 2024,––
(a) in sub-section (2), for the opening portion and clause (i) thereof, the following shall be substituted, namely:––
“(2) For the purposes of sub-section (1A), the total income of the person referred to therein, shall be computed-
(i) without any exemption or deduction under the provisions of clause (5) or clause (13A) or prescribed under clause (14) (other than those as may be prescribed for this purpose) or clause (17) or clause (32), of section 10 or section 10AA or clause (ii) or clause (iii) of section 16 or clause (b) of section 24 [in respect of the property referred to in sub-section (2) of section 23] or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or subclause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or under any of the provisions of Chapter VI-A other than the provisions of sub-section (2) of section 80CCD or sub-section (2) of section 80CCH or section 80JJAA;”;
(b) in sub-section (3), after the proviso, the following proviso shall be inserted, namely:––
“Provided further that in a case where,––
(i) the assessee has not exercised the option under sub-section (5) for any previous year relevant to the assessment year beginning on or before the 1st day of April, 2023;
(ii) the income-tax on the total income of the assessee is computed under sub-section (1A); and
(iii) there is a depreciation allowance in respect of a block of assets which has not been given full effect prior to the assessment year beginning on the 1st day of April, 2024,
corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2023 in the manner as may be prescribed.”;
(c) for sub-section (4), the following sub-section shall be substituted, namely:––
‘(4) In case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA,––
(i) who has exercised option under sub-section (5) for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2021 but before the 1st day of April, 2024;
(ii) whose total income is computed under subsection (1A),
the conditions contained in sub-section (2) shall be modified to the extent that the deduction under section 80LA shall be available to such Unit subject to fulfilment of the conditions contained in the said section.
Explanation.-For the purposes of this sub-section, the term “Unit” shall have the meaning assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005)’;
(d) in sub-section (5), after the proviso, the following proviso shall be inserted, namely:––
“Provided further that the provisions of this subsection shall not apply for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2024.”;
(e) after sub-section (5), the following sub-section shall be inserted, namely:––
“(6) Nothing contained in sub- section (1A) shall apply to a person where an option is exercised by such person, in the manner as may be prescribed, for any assessment year, and such option is exercised,––
(i) on or before the due date specified under subsection (1) of section 139 for furnishing the return of income for such assessment year, in case of a person having income from business or profession, and such option once exercised shall apply to subsequent assessment years; or
(ii) along with the return of income to be furnished under sub-section (1) of section 139 for such assessment year, in case of a person not having income referred to in clause (i):
Provided that the option under clause (i), once exercised for any previous year can be withdrawn only once for a previous year other than the year in which it was exercised and thereafter, the person shall never be eligible to exercise the option under this subsection, except where such person ceases to have any income from business or profession in which case, option under clause (ii) shall be available.”.
Notes on Clauses:
Clause 50 of the Bill seeks to amend section 115BAC of the Income-tax Act relating to tax on income of individuals and Hindu undivided family.
The provisions of the said section, inter alia, provides that the income-tax payable in respect of the total income of a person, being an individual or a Hindu undivided family, for any previous year relevant to the assessment year beginning on or after 1st April, 2021, shall, at the option of such person, be computed at the rate of tax given in the Table therein, if the conditions contained in sub-section (2) are satisfied.
It is proposed to amend the marginal heading of the said section so as to provide that the said section applies to tax on income of individuals, Hindu undivided family and others.
It is further proposed to insert a new sub-section (1A) in the said section so as to provide that notwithstanding anything contained in this Act but subject to the provisions of Chapter XII, the income-tax payable in respect of the total income of a person, being an individual or Hindu undivided family or association of persons (other than a cooperative society), or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2, other than a person who has exercised an option under sub-section (6), for any previous year relevant to the assessment year beginning on or after 1st April, 2024, shall be computed at the rate of tax given in the Table therein.
These amendments will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years.
It is also proposed to amend clause (i) of sub-section (2) of the said section to give reference of sub-section (2) of section 80CCH therein to provide the benefit of concessional tax regime to an individual enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after 1st November, 2022.
This amendment will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years.
It is also proposed to amend sub-section (2) of the said section, inter alia, to provide that for the purposes of sub-section (1A), the total income of the person referred to therein shall be computed without any exemption or deduction under the provisions of clause (5) or clause (13A) or prescribed under clause (14) (other than those as may be prescribed for this purpose) or clause (17) or clause (32) of section 10 or section 10AA or clause (ii) or clause (iii) of section 16 or clause (b) of section 24 [in respect of the property referred to in subsection (2) of section 23] or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or under any of the provisions of Chapter VI-A other than the provisions of sub-section (2) of section 80CCD or sub-section (2) of section 80CCH or section 80JJAA.
It is also proposed to insert a second proviso in sub-section (3) of the said section so as to provide that in a case where,––
(i) the assessee has not exercised the option under sub-section (5) for any previous year relevant to the assessment year beginning on or before the 1st day of April, 2023;
(ii) the income-tax on the total income of the assessee is computed under sub-section (1A); and
(iii) there is a depreciation allowance in respect of a block of assets which has not been given full effect prior to the assessment year beginning on the 1st day of April, 2024,
corresponding adjustment shall be made to the written down value of such block of assets as on 1st April, 2023 in the manner as may be prescribed.
It is also proposed to substitute sub-section (4) of the said section so as to provide that in case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA,––
(i) who has exercised option under sub-section (5) for any previous year relevant to the assessment year beginning on or after 1st April, 2021 but before 1st April, 2024;
(ii) whose total income is computed under sub-section (1A),
the conditions contained in sub-section (2) shall be modified to the extent that the deduction under section 80LA shall be available to such Unit subject to fulfilment of the conditions contained in the said section.
It is also proposed to insert a proviso in sub-section (5) of the said section so as to provide that the provisions of the sub-section shall not apply for any previous year relevant to the assessment year beginning on or after 1st April, 2024, that is, a person, being an individual or Hindu Undivided Family, shall not exercise the option for concessional rate of taxation under sub-section (1) for any previous year relevant to the assessment year beginning on or after 1st April, 2024.
It is also proposed to insert sub-section (6) in the said section so as to provide that nothing contained in sub- section (1A) shall apply to a person where an option is exercised by such person, in the manner as may be prescribed, for any assessment year, and where such option is exercised––
(i) on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for such assessment year, in case of a person having income from business or profession, and such option once exercised shall apply to subsequent assessment years; or
(ii) along with the return of income to be furnished under sub-section (1) of section 139 for such assessment year, in case of a person not having income referred to in clause (i).
However, the option under clause (i) of the said sub-section (6), once exercised for any previous year can be withdrawn only once for a previous year other than the year in which it was exercised and thereafter, the person shall never be eligible to exercise the option under that sub-section, except where such person ceases to have any income from business or profession in which case, option under clause (ii) of that sub-section shall be available.
These amendments will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years.
