INCOME TAX EXEMPTIONS

NOW YOU WON’T BE ELIGIBLE FOR THE INCOME TAX EXEMPTIONS/DEDUCTIONS. KNOW WHY?

With the introduction of the Finance Bill, 2020; there has been a transformation in the Income tax structure & Income tax slab rates which are used to identify the total Income tax liability of an Individual towards the Income tax authorities and the Government of India. This Finance bill, 2020 which is introduced in the Union Budget 2020, brings in changes in the IT Act, 1961 thereby proposes to make an additional Income tax framework which is in addition to the one which is applicable in the current financial year.

These new amendments in the IT act, 1961 which are proposed in the Union budget, 2020 will be applicable from F.Y. 2020-21. Those Income tax payers who opt for this new taxation framework will not be able to grab the complete benefit of the Income tax exemptions/deductions.

Read More-  Highlights of Budget 2020

A list of exemptions/deductions which an Income tax payer cannot take the benefit from the A.Y. 2021-22 are mentioned in detail below:

·        Allowance mentioned in Section 10 of the IT Act, 1961

–         Leave Travel Allowance

–         House Rent Allowance

–         Conveyance Allowance

–         Others Income tax allowances mentioned under this section

[Note: These exemptions/deductions directly depend on the actual amount of expenditure to the extent the amount is utilised]

  • SEZ Exemptions specified under section 10AA of the IT Act, 1961
  • Standard deduction as mentioned in section 16 – IT Act, 1961
  • Deductions mentioned under section 32AD, 33 (AB, ABA), 35 (AD, ADA)
  • Deductions specified in section 80GGA of the IT Act, 1961 for donation made in respect to scientific research
  • Deductions mentioned under chapter-VI (A) of the IT Act, 1961

SectionParticularsSectionParticulars
80CInvestments80GGHouse rent paid
80CCCInsurance Premium80EInt. on education loan
80CCDPension contribution80EEInt. on Home loan
80DMedical insurance80DDDisabled dependent
80TTAInt. on savings A/C80GDonations

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