On 13th April, the Ministry of Finance, Government of India issued a circular to clarify taxation (TDS) rules for individuals or HUFs having income other than income from Business or Profession and looking to exercise the option to be taxed under Section 115BAC of the Income Tax Act.
The circular states that wef AY 2021-22, such persons can exercise the option to be taxed under Section 115BAC of the Income Tax Act. The concessional rates provided under this section are subject to the condition that the total income of such a person will be computed without specified exemptions, deductions, loss setoff or additional depreciation.
Any employee who wishes to be taxed under this new scheme of concessional rates is required to intimate the deductor (employer). Upon such intimation, the employer (deductor) should deduct TDS for Salary as per the provisions of section 115BAC of the Act. If employee fails to make such an intimation, the employer will calculate and deduct TDS without considering the provision of Section 115BAC.
Further, the intimation made to the deductor can be for the purpose of TDS for the previous year only.
To know more about this clarification, read the circular here
For any queries or concerns about Section 115BAC of the Income Tax Act, please call Taxguru at 9224618250 or email us at info@mytaxguru.net.
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