CBDT notifies certain exemptions to employees opting for lower Income Tax regime
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The Central Board of Direct Taxes (CBDT) has now amended Income Tax rules to prescribe certain exemptions which can be availed by the employees.
These include any allowance granted to meet the cost of travel on tour or on transfer, any allowance, whether, granted on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty. It also includes exemption for any allowance granted to meet the expenditure incurred on conveyance in performance of duties of an office or employment of profit, provided that free conveyance is not provided by the employer.
The CBDT has further clarified that while determining value of perquisites, no exemption will be available in respect of free food and non-alcoholic beverage provided by employer through paid voucher.
Further, blind, deaf and dumb or orthopedically handicap employees can also claim ad-hoc exemption of transport allowance of Rs 3,200 per month while computing salaried income.
Offering an optional lower rate of income tax to individuals, Finance Minister Nirmala Sitharaman in her Budget for 2020-21 proposed new optional tax regime under section 115BAC of I-T Act for individuals willing to forego certain specified deductions or exemptions while computing total income for tax purpose. Under this, annual income up to Rs 2.5 lakh is exempt from tax. Those individuals earning between Rs 2.5 lakh and Rs 5 lakh will pay 5 per cent tax. Income between Rs 5 and 7.5 lakh will be taxed at 10 per cent, while those between Rs 7.5 and 10 lakh at 15 per cent.
Those earning between Rs 10 and 12.5 lakh will pay tax at the rate of 20 per cent, while those between Rs 12.5 and Rs 15 lakh will pay at the rate of 25 per cent. Income above Rs 15 lakh will be taxed at 30 per cent. #casansaar (Source - The Hindustan Times)
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