ATR u/s 115BAC is available only to Individual/ HUF for AY 2021-22 to 2023-24 if the option is exercised.

From the AY 2024-25, ATR is the default tax regime for Individual/ HUF/AOP/BOI/AJP. However this assesse can avail the benefit of regular tax regime by exercising the option u/s 115BCA(6).

Slab in Rs.

Tax rate

Upto 3,00,000

Nil

3,00,000 to 7,00,000

5%

7,00,000 to 10,00,000

10%

10,00,000 to 12,00,000

15%

12,00,000 to 15,00,000

20%

Above 15,00,000

30%

Slab in Rs.

Tax rate

Upto 3,00,000

Nil

3,00,000 to 6,00,000

5%

6,00,000 to 9,00,000

10%

9,00,000 to 12,00,000

15%

12,00,000 to 15,00,000

20%

Above 15,00,000

30%

Section 115BAC(2)(i)

Total income shall be calculated without giving following exemptions or deduction

1

LTC [S-10(5)]

2

HRA [S-10(13)]

3

Special Allowance other than allowed allowances [S-10(14)]

4

Allowances to MPs [S-10(17)]

5

Exemption upto Rs.1,500 i.e clubbing of minor income [S-10(32)]

6

SEZ [S-10AA]

7

Exemption of perquisites in respect of free food and non alcoholic beverages [S-17(2)]

8

For the AY 2021-22 to 2023-24 Standard deduction [S-16(ia)]

9

Entertainment allowance deduction [S-16(ii)]

10

Professional tax deduction [S-16(iii)]

11

Interest on housing loan in the case of one or two self occupied properties. [S-24(b)]

12

Additional depreciation [S-32(1)(iia)]

13

Investment allowance in case of backward area [S-32AD]

14

Tea/Coffee/rubber development account [S-33AB]

15

Site restoration fund [S-33ABA]

16

Deduction for scientific research [S-35(1)(ii), (iia), (iii), 35(2AA)]

17

Capital expenditure pertaining to specified business [S-35AD]

18

Agricultural extension project [S-35CCC]

19

For the AY 2021-22 to 2023-24, standard deduction in the case of family pension [S-57(iia)]

20

Deduction u/s 80C to 80U except

(a) employer’s contribution towards NPS u/s 80CCD(2)

(b) Central government’s contribution towards Agniveer Corpus Fund u/s 80CCH(2) from AY 2023-24

(c) Deduction u/s 80JJA;

(d) Deduction u/s 80LA(1A)

1

Interest on PPF (as well as final payment on maturity) u/s 10(11)

2

Interest on Sukanya Samridhi account as well withdrawal on final payment [S-10(11A)]

3

Following exemptions are available

(a) Gratuity [S-10(10)]

(b) Commutation of pension [S-10(10A)]

(c) Leave encashment [S-10(10AA)]

(d) Retrenchment compensation [S-10(10B)]

(e) Compensation on voluntarily retirement [S-10(10C)]

(f) Tax on non monetary perquisites paid by employer [S-10(10CC)]

(g) Sum received under life insurance policy [S-10(12)]

(h) Withdrawal from NPS [S-10(12A)/(12B)]

(i) Payment from approved superannuation fund [S-10(13)]

(j) S-10(14)

(i) Conveyance/ Travelling allowance used for office purpose

(ii) Transport allowance of Rs.3200 p.m. to an employee who is blind or deaf and dumb or orthopedically handicapped.

(k) Interest of Rs.3,500 or Rs.7,000 on post office saving bank account [S-10(15)]

(l) Standard deduction to salaried employee u/s 16(ia) 

(i) Rs.50,000 for AY 2024-25

(ii) Rs.75,000 for AY -2025-26

(m) Standard deduction in case of family pension u/s 57(iia)

(i) Rs.15,000 or 1/3 of salary for AY 2024-25.

(ii) Rs.25,000 or 1/3 of salary for AY 2024-25.

(n) employer’s contribution towards NPS u/s 80CCD(2)

(o) Central government’s contribution towards Agniveer Corpus Fund u/s 80CCH(2) from AY 2023-24

(p) Deduction u/s 80JJA;

(q) Deduction u/s 80LA(1A)

Section 115BAC(2)(ii)

Total income shall be computed without set off of any loss

1. carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i);
2. under the head "Income from house property" with any other head of income;

Section 115BAC(2)(iv)

Total income shall be computed without any exemption or deduction for allowances or perquisite, by whatever name called, provided under any other law for the time being in force.

Section 115BAC(3)

The loss and depreciation referred to in clause (ii) above shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year

Section 115BAC(2)(iii)

Total income shall be computed by claiming the depreciation, if any, u/s 32

except depreciation u/c 32(1)(iia).

Section 115BAC(5)

Nothing contained in this section shall apply unless option is exercised in the prescribed manner

Section 115BAC(5)(i)

Person having income from business or profession, must exercise option on or before the due date specified u/s 139(1) for furnishing ITR for any assessment year commencing on or after the 1st day of April, 2021, and

such option once exercised shall apply to subsequent assessment years;

Option once exercised can be withdrawn once in subsequent year

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 option under this section, except where such person ceases to have any income from business or profession in which case, option under clause (ii) shall be available:

Section 115BAC(5)(ii)

Person having income other income may exercise option alongwith ITR

2^nd Proviso to Section 115BAC(5)

Provided further that the provisions of this sub-section shall not apply for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2024.

From the AY 2024-25, ATR is the default tax regime. However assesse can avail the benefit of regular tax regime by exercising the option u/s 115BCA(6) as follows.

Section 115BAC(6)(i)

For old tax regime, person having income from business or profession

must exercise option

on or before the due date specified u/s 139(1) for furnishing ITR for such assessment year,

and such option once exercised shall apply to subsequent assessment years;

Section 115BAC(6)(ii)

For old tax regime, person having other income

May exercise option along with the ITR to be furnished u/s 139(1) for such AY

An employee (not having business or professional income) can opt for old regime by intimating the same to the employer.

AY

Total income <=

Lower of

2021-22 to 2023-24

Rs.5,00,000

100% of tax or Rs.12,500

2024-25  onwards

Rs.7,00,000

100% of tax or Rs.25,000

Rebate u/s 87A is subject to marginal relief from AY 2024-25.

Ex-1

Income Rs.7,05,000, then in that case, income tax cannot be more than Rs.5,000

If an assesse has other incomes which are taxable under other provisions of Chapter XII (i.e. S-110 to 115BBG), then tax on such other income shall be calculated at the rates specified in related sections and balance income shall be u/s 115BAC as per the rates given above.

Except in few cases, surcharge rate is same in both regime as follows:

Taxable Income (Rs.)

Surcharge rate on Income Tax

Upto 50 lacs

Nil

50 lacs to 1 Cr

10%

1 Cr to 2 Cr

15%

Above Rs.2 Cr

25%

(a) If income includes Capital tax taxable u/s 111A/112/112A.

(b) In case of AOP (consisting only companies as its member)

Health and education cess is applied @4% on Income tax and surcharge.